(a) Pursuant to section 17 of the Act, 33 U.S.C. 917, when a trust
fund which complies with section 302(c) of the Labor-Management
Relations Act of 1947, 29 U.S.C. 186(c) [LMRA], established pursuant to
a collective bargaining agreement in effect between an employer and an
employee entitled to compensation under this Act, has paid disability
benefits to an employee which the employee is legally obligated to repay
by reason of his entitlement to compensation under this Act, a lien
shall be authorized on such compensation in favor of the trust fund for
the amount of such payments.
(b) (1) An application for such a lien shall be filed on behalf of
the trust fund with the district director for the compensation district
where the claim for compensation has been filed, 20 CFR 702.101. Such
application shall include a certified statement by an authorized
official of the trust fund that:
(i) The trust fund is entitled to a lien in its favor by reason of
its payment of disability payments to a claimant-employee (including his
name therein);
(ii) The trust fund was created pursuant to a collective bargaining
agreement covering the claimant-employee;
(iii) The trust fund complies with section 302(c) of the Labor-
Management Relations Act of 1947, 29 U.S.C. 186(c);
(iv) The trust agreement contains a subrogation provision entitling
the fund to reimbursement for disability benefits paid to the claimant-
employee who is entitled to compensation under the Longshoremen's Act;
(2) The statement shall also state the amount paid to the named
claimant-employee and whether such disability benefit payments are
continuing to be paid.
(3) If the claimant has signed a statement acknowledging receipt of
disability benefits from the trust fund and/or a statement recognizing
the trust fund's entitlement to a lien against compensation payments
which may be received under the Longshoremen's and Harbor Worker's
Compensation Act as a result of his present claim and for which the fund
is providing disability payments, such statement(s) shall also be
included with or attached to the application.
(c) Upon receipt of this application, the district director shall,
within a reasonable time, notify the claimant, the
employer and/or its compensation insurance carrier that the request for
a lien has been filed and each shall be provided with a copy of the
application. If the claimant disputes the right of the trust fund to the
lien or the amount stated, if any, he shall, within 30 days after
receipt of the application or such other longer period as the district
director may set, notify the district director and he shall be given an
opportunity to challenge the right of the trust fund to, or the amount
of, the asserted lien; notice to either the employer or its compensation
insurance carrier shall constitute notice to both of them.
(d) If the claim for compensation benefits is resolved without a
formal hearing and if there is no dispute over the amount of the lien or
the right of the trust fund to the lien, the district director may order
and impose the lien and he shall notify all parties of the amount of the
lien and manner in which it is to be paid.
(e) If the claimant's claim for compensation cannot be resolved
informally, the district director shall transfer the case to the Office
of the Chief Administrative Law Judge for a formal hearing, pursuant to
section 19(d) of the Act, 33 U.S.C. 919(d), and 20 CFR 702.317. The
district director shall also submit therewith the application for the
lien and all documents relating thereto.
(f) If the administrative law judge issues a compensation order in
favor of the claimant, such order shall establish a lien in favor of the
trust fund if it is determined that the trust fund has satisfied all of
the requirements of the Act and regulations.
(g) If the claim for compensation is not in dispute, but there is a
dispute as to the right of the trust fund to a lien, or the amount of
the lien, the district director shall transfer the matter together with
all documents relating thereto to the Office of the Chief Administrative
Law Judge for a formal hearing pursuant to section 19(d) of the Act, 33
U.S.C. 919(d), and 20 CFR 702.317.
(h) In the event that either the district director or the
administrative law judge is not satisfied that the trust fund qualifies
for a lien under section 17, the district director or administrative law
judge may require further evidence including but not limited to the
production of the collective bargaining agreement, trust agreement or
portions thereof.
(i) Before any such lien is approved, if the trust fund has provided
continued disability payments after the application for a lien has been
filed, the trust fund shall submit a further certified statement showing
the total amount paid to the claimant as disability payments. The
claimant shall likewise be given an opportunity to contest the amount
alleged in this subsequent statement.
(j) In approving a lien on compensation, the district director or
administrative law judge shall not order an initial payment to the trust
fund in excess of the amount of the past due compensation. The remaining
amount to which the trust fund is entitled shall thereafter be deducted
from the affected employee's subsequent compensation payments and paid
to the trust fund, but any such payment to the trust fund shall not
exceed 10 percent of the claimant-employee's bi-weekly compensation
payments.
(Approved by the Office of Management and Budget under control number
1215-0160)
[42 FR 45301, Sept. 9, 1977, as amended at 50 FR 395, Jan. 3, 1985; 51
FR 4282, Feb. 3, 1986]
