The Eleventh Circuit’s December 22nd decision in Blanchard v. Walker is a timely cautionary tale for workers’ compensation carriers about the high cost of passivity in Alabama third-party litigation.[1] Although the case arose from a multistate fact pattern, its real lesson is procedural and strategic: a carrier’s lien and subrogation recovery depend on the continued viability of the employee’s underlying claim, and once that claim is dismissed or extinguished, for any reason, the carrier may be left with little or no meaningful remedy.
In Blanchard, the employee was injured in Alabama while working and filed his third-party action suit against the tortfeasor shortly before the Alabama two-year statute of limitations expired. However, the case was dismissed without prejudice for pleading and jurisdictional deficiencies, and the subsequent re-filed suit was held time-barred. Zurich, the workers’ compensation carrier, intervened and later filed a complaint in intervention seeking recovery, but once the employee’s claim was dismissed with prejudice as untimely, the court concluded Zurich’s remaining claims against the tortfeasor were effectively moot because Zurich’s subrogation posture was derivative of the employee’s rights and could not survive the death of the employee’s cause of action.
This dynamic is particularly important in Alabama because workers’ compensation subrogation is statutory, but it is still fundamentally dependent on the existence of a viable third-party claim and a recovery. Alabama law allows the employer or carrier to be reimbursed from damages recovered by the employee and also provides the carrier with a distinct mechanism to file suit if the employee does not do so within the applicable limitations period, including a limited extension window.[2] But Blanchard highlights the practical reality that once an employee’s tort action is dismissed for any reason, an intervening carrier does not automatically have an independent, free-standing claim that can proceed against the tortfeasor as if nothing happened.
Carriers sometimes assume that “a lien is a lien,” and that if they simply notify plaintiff’s counsel and the tort carrier, payment will take care of itself without the carrier expending money on intervention and without incurring the risk that plaintiff’s counsel will claim a common-fund fee. Blanchard underscores why that approach can be disastrous: when the case dies, the lien is often worthless because there is no recovery from which to pay it and no viable cause of action to support it.
This decision also reminds us that in Alabama, a subrogated carrier has a lien on the employee’s case for any indemnity benefits paid; but in order to recover medical benefits it has paid, the carrier does not have a lien—it must plead and prove an independent case against the tortfeasor because it is subrogated to the employee’s rights but Alabama does not give it a right of reimbursement as most other states do.
The larger point is that intervention is not merely about being paid at the end of a case. It is about controlling the risk variables that determine whether there will be an end at all, and whether the carrier will recover its lien and, more importantly, obtain and preserve its credit. One of the most persistent errors in workers’ compensation subrogation is the belief that the carrier can remain on the sidelines to avoid engaging subrogation counsel, hoping that the plaintiff’s lawyer will do all the work, the case will resolve favorably, and a check in the amount of its workers’ compensation lien will magically appear in the mailbox. The reality is that the plaintiff’s lawyer represents the plaintiff, not the carrier, and the plaintiff’s incentives often diverge sharply from the carrier’s. An intervening carrier must have its own counsel to evaluate liability, damages, and collection risk, rather than being forced to rely on plaintiff’s counsel’s often self-interested assessment that liability is weak or that the lien must be compromised to avoid “recovering nothing.”
This is especially true in catastrophic files where the carrier’s future credit can dwarf the lien itself and where the pressure to “give something up to get the deal done” can be relentless. Intervention also protects against structural settlement tactics that can materially impair or extinguish subrogation rights. Without an active presence, a carrier may not learn of (or may be unable to prevent) settlement allocations designed to minimize reimbursement or credit, including allocations to non-beneficiary categories, consortium claims, or other gerrymandered divisions that appear facially legitimate but functionally strip the carrier’s recovery.
Intervening also gives the carrier standing to object, to insist on proper documentation, and to ensure settlement terms do not quietly dispose of subrogation through artful drafting. It also provides the most practical defense against settlements structured around defendants with immunity from subrogation or around waiver issues, additional insured problems, contractual indemnity, or other coverage arrangements that can shift recovery into buckets from which the carrier cannot collect unless it is actively policing the case.
Another core intervention benefit is preventing the plaintiff’s lawyer from effectively denying recovery through inactivity or strategic defendant selection. Plaintiff’s counsel may file suit and let it sit dormant, may pursue minimal discovery, may omit viable defendants, or may decide to chase recoveries the carrier cannot reach, such as UIM benefits, while quietly abandoning the tort defendants that would satisfy the lien and generate credit.
Unlike the plaintiff, the carrier has a long-term financial stake in preserving credit and in maximizing net recovery. Intervention permits the carrier to act as a litigation watchdog to ensure the case is properly developed and prosecuted, including insisting that discovery is pursued, liability theories are developed, and all appropriate defendants are brought into the case.
Blanchard also ties directly to one of the most important practical reasons to intervene: a case can be dismissed (intentionally or unintentionally) or nonsuited in a way that destroys the carrier’s ability to recover, particularly where limitations is close, the pleadings are deficient, or sanctions and procedural missteps threaten dismissal.
In Blanchard, the employee’s tort claim was lost on a statute of limitations argument after the first dismissal, and Zurich’s intervention did not revive it.
Alabama’s statutory structure gives carriers tools, but the tools are time-sensitive and require active management, not blind reliance on plaintiff’s counsel’s handling of the litigation. Once limitations issues arise, waiting to intervene is a gamble with asymmetrical downside: the carrier may save a fee in the short term, but lose the entire lien and credit in the long term.
Finally, the instinctive aversion to engaging subrogation counsel that drives many carriers to “hold out” too long is often poorly analyzed, which comes at a steep price. Even where a fee or cost-sharing concept applies, the carrier is balancing that expense against the much larger risk that it recovers nothing, loses credit, or is forced into separate litigation to unwind an improper settlement or to pursue a conversion claim when funds are disbursed without honoring the lien. And that hard lesson directly affects the insured’s risk modifier and the increase to future premiums they will be saddled with—all because the carrier wanted to avoid engaging qualified subrogation counsel.
Intervention is frequently the least expensive way to avoid the most expensive outcomes. It positions the carrier to protect its reimbursement, preserve and maximize credit, detect and prevent settlement manipulation, and ensure that the third-party claim remains viable and properly litigated. Blanchard is the reminder that when a claim collapses, so does the carrier’s leverage and, often, the carrier’s recovery. In Alabama, the surest way to keep that from happening is early, decisive intervention with active participation, rather than passive monitoring and hope.
[1] Blanchard v. Walker, 2025 WL 3708331 (11th Cir. Dec. 22, 2025).
[2] Ala. Code § 25-5-11(d).
