In this study, the sensitivity of the earth-fault protection (EFP) in medium-voltage distribution networks with a compensated neutral point is investigated. An adaptive residual voltage threshold is proposed as a solution for enhanced EFP sensitivity. The optimal threshold adaptation is based on the horizontal communication between a Petersen-coil (PC) controller and IEDs, utilising IEC 61850 GOOSE messages. The maximum residual voltage information, from a healthy state of the network, is transferred from the PC controller to IEDs, where an optimal residual voltage threshold for the EFP is determined. This adaptation allows maximum protection sensitivity and security to be obtained for each substation and the network state.