Third-Party Claims

California’s workers’ compensation system is a “no fault” system.  This means that in order to recover wages and medical costs under a workers’ compensation claim, an employee is not required to prove that his or her injury is a result of the employer’s intentional or negligent conduct.  In the majority of workers’ compensation cases, there are only two parties to the case: the injured worker and the employer together with the workers’ compensation insurance provider.  However, in some cases, there will be a third party involved.  There are some cases where the employee’s injury is a result of not simple common work place conditions, but because of the negligent or intentional conduct of a third person.  Common examples include faulty equipment or a car accident caused by the negligence of the other driver.  In both of those cases, as long as the worker is acting in the course and scope of employment, the injury would be compensable under the workers’ compensation system.  However, the inquiry does not end there.  Instead, the employer and often the insurance company will bring an action against the third party to recover the costs for wages and medical benefits that had to be paid out to the injured employee as a result of the third party’s conduct.  It is important to note, however, that the case against the third party is a separate action from the workers’ compensation case.  The workers’ compensation case between the employee and the employer proceeds like normal through the typical workers’ compensation system.  The claim against the third party, however, will go through civil court just like any other tort case.  It is not uncommon for the employer to need two different attorneys, as one would be familiar with workers’ compensation while the other will be an attorney who focuses on tort cases.  Particularly when the third party claim includes a product liability case (such as where equipment is faulty), it is likely an employer will need to hire another attorney for that, as it is a specialized area of law that not all attorneys practice or are familiar with.

We have extensive experience helping our clients understand third party claims in workers’ compensation cases.  Call us today to talk about your case.

Workers’ Compensation and Third-Party Claims

In California, an employer is required to carry workers’ compensation insurance to make sure that injuries suffered by employees in work-related incidents will be covered. However, there are some situations in which an employer may not be completely responsible for an employee’s injuries. For example, if an employee is injured because of a scaffolding collapse, and the scaffolding company negligently produced the product, then there is an additional issue in the case of the scaffolding company’s liability. This is called a third-party claim, and provides options for both the employer as well as the injured employee.

If an employee’s injuries were influenced by the actions or negligence of a third-party, then the employee has a cause of action against that third-party. The employee has the right to bring a case against the third party for their actions at the same time the workers’ compensation claim is pending. The employee would bring a personal injury lawsuit against the third party, which is obviously different than a workers’ compensation claim against an employer. This is called a “cross over case”. In the personal injury case, the employee will need to prove that the third party’s negligence or actions contributed to the injury.

In the event the employee wins the suit against a third party for the personal injury, then the employer has the right to be reimbursed from the money award received by the employee for any workers’ compensation benefits already paid by the employer. The reason for this is to prevent an employee from “double dipping,” i.e. receiving an award from the employer and also an award from the third party for the same injuries.

In order to recover any amounts under this theory, an employer has several options. The first would be to settle with the third party out of court. If this is not an option, the employer can also directly sue the third party. The employer may also join in the action already filed by the employee. Finally, there is also a possibility for the employer to file a lien against an award. If the employer takes the option of filing a lien against the employee’s award, the employer will only get paid after the employee’s attorneys’ fees and litigation expenses have been paid out of the settlement.

If your business has the potential of a third party case, you need an experienced attorney on your side. Call me today at (714) 516-8188 for an appointment to discuss your business’s third party claim.

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