In a third-party case with a $100,000 recovery, attorney fees $36,000, costs $4,000, and a workers’ compensation lien of $40,000, what is the net recovery to the injured worker after credit for the third-party recovery?

• A. 60k
• B. 100k
• C. 20k
• D. 36k

Answer: (C)

When a worker obtains a third-party recovery in a workers’ compensation case, that money is first used to pay the workers’ compensation lien and any attorney fees and costs incurred to secure the recovery. What’s left goes to the injured worker.

Here, the third-party recovery is 100,000. The workers’ compensation lien is 40,000, leaving 60,000 to cover the attorney fees and costs. Attorney fees are 36,000, reducing the amount to 24,000. Subtract the costs of 4,000, and the net to the worker is 20,000.