The Workers Compensation Law § 29 (I) allows the compensation insurance carrier to place a lien on the proceeds of a third-party recovery in order to recoup the Workers Compensation benefits paid to the injured party that resulted from the work-related incident that gave vice to the third-party action. However, Section I requires that the carrier’s lien be reduced by “. . . the reasonable and necessary expenses, including attorneys’ fees and disbursements,” incurred in pursuing the third-party litigation (see Kelly v. State Insurance Fund, 60 N.Y. 2d 131 at 136 (1983).

Thus, the calculation of the extent to which the Workers Compensation lien is offset or reduced has become known as “Kelly calculations.” More specifically, where personal injury or wrongful death litigation has been successful on behalf of a plaintiff who has been receiving Workers Compensation benefits, the plaintiff is obligated to satisfy the Workers Compensation carrier’s lien out of the proceeds of the settlement. However, the Workers Compensation carrier is also obligated not to pay their proportionate share of the attorney’s fees and disbursements of the third-party action. Not only that, but the present value of the future Workers Compensation payments may be used to offset a portion or all of the outstanding lien. Moreover, if the present value of the future Workers Compensation payments exceeds the amount of the lien, “fresh money” can be generated, i.e., a separate payment made to the plaintiff and the plaintiff’s attorney, in recognition that the Workers Compensation carrier is no longer obligated to make the future Workers Compensation payments to the plaintiff as a result of the successful litigation of the third-party action (see also, Goga v. Gulf Oil Corp., 98 A.D. 2d 936 (3rd Dept. 1983).

K.W. Reagles and Associates can provide attorneys with Kelly calculations, regardless of whether we were involved in the third-party litigation. In order for us to proceed, we will need the following information:

• The case caption
• $ amount of gross settlement
• $ amount of disbursements
• $ amount of Workers Compensation carrier’s lien
• Weekly $ amount of plaintiff’s Workers Compensation benefit payment
• Plaintiff’s date of birth
• Date of settlement/verdict

Turn-around time for Kelly calculations is usually within 24 hours. Call 1-888-778-1981 to discuss your need for a Kelly calculation.