3rd Party Liability
Blog Post By:
Dennis R. Kurth, Attorney
Snow, Carpio & Weekley
When a worker is injured because
of the negligence of a third-party (someone who does not work for the same
employer), the worker can file a claim for and collect workers’ compensation
benefits from his/her employer’s insurance carrier and sue the negligent third-party
within one year from the date of the accident.
The workers’ compensation law gives the compensation carrier a statutory
lien against the injured worker’s third-party recovery to the extent of all of
the medical and indemnity benefits it has paid to or on behalf of the injured
worker.
Where the settlement of any
third-party claim is for less than the amount of the carrier’s lien, however,
the injured worker must obtain the compensation carrier’s written approval
to settle. The purpose of this requirement
is to protect the workers’ compensation carrier’s subrogation interest which
could be extinguished by an inadequate settlement.
Failure to obtain such written
approval can trigger significant penalties including, at the extreme,
forfeiture of all future workers’ compensation benefits, both medical and
indemnity. In other words, even if the
injury was serious and the worker might need surgery in the future, he/she
could never reopen the case. Although
the appellate courts in Arizona, over the years, have backed off on strict
forfeiture in these situations, most workers’ compensation carriers, uninformed
about case law developments, still try to impose forfeiture where the statute
is violated.
Injured workers who have
third-party cases, especially if they are pursuing these claims without an
attorney, should get legal advice from a workers’ compensation attorney before
settling such cases so that they do not run the risk of violating the statute
and forfeiting future benefits. These
problems can often arise where the third-party, in an auto accident for
example, has only a minimum liability policy which is quickly tendered to the
injured worker. It can also happen in
the context of a third-party lawsuit where several defendants are sued and a
small settlement is reached with a minimally-liable defendant. In such situations, it is well worth
consulting an experienced workers’ compensation attorney to make sure that the
settlement complies with the workers’ compensation law and that the injured worker
does not forfeit future benefits.
If you or someone you know has been hurt on the job or has an disability that could prevent them from working for at least one year, contact Snow, Carpio & Weekley for a free consultation by calling toll-free at 855-325-4781. You may also visit our website at: www.workinjuryaz.com
