Injured at work due to third party negligence?  (Do you have a third party claim?)

On many occasions a work related injury may have the additional potential to be a “third party claim”. Most workers compensation systems allow for a third party claim against one not in the employ of the injured worker’s employer who causes injury as a result of negligence or even an intentional act. An injured worker generally does not have to make a choice between receiving workers’ compensation benefits and pursuing a third-party claim but rather is allowed to pursue both remedies.  In such situations the workers compensation insurance carrier is given a lien against the third party recovery.

In most occasions the third-party claim will take much longer to resolve than the workers compensation claim. This allows the injured worker to receive ongoing workers’ compensation benefits including temporary total disability payments (“time loss”), temporary partial disability payments (loss of earning power), permanent partial disability payments, permanent total disability payments, medical aid benefits, vocational assistance where appropriate, together with other workers compensation benefits that might be available while the third-party claim is pursued. This minimizes the suffering compared to a normal negligence claim where the injured party must self finance their own lost time, medical expenses etc. until the tort claim is resolved.

The amount that a successful third-party claimant must reimburse to the workers’ compensation carrier varies based on the workers compensation system.  Under the Washington State Industrial Insurance Act there is a precise formula to determine the reimbursement to either the Department of Labor and Industries or the self-insured employer. The formula is such that the injured worker is guaranteed to receive some of the money from the third-party recovery before for reimbursement to the Department or the self-insured employer for the lien.  Under the current state of the law recoveries for general damages or by a spouse for loss of consortium are not subject to the lien under the theory that the workers compensation act does not compensate an injured worker for either element of damages. This issue is before the State Supreme Court at this time for review and this will be updated as necessary when the Court reaches a decision.

Under the Longshore and Harbor Workers’ Compensation Act, and related laws, the lien of the insurance carrier or self-insured employer is repaid 100%, after the payment of attorney’s fees and costs, before the injured worker receives any monies from the third-party recovery.  At this point in time the insurance carriers’ lien extends to the full recovery including general damages.

Under either the Washington State system or the Longshore act a third-party recovery that will be a deficiency settlement (recovering less than the amount paid, or payable, as worker’s compensation benefits) must receive prior approval. Failure to follow the statutory requirements for such approval can jeopardize further benefits under the workers’ compensation system.

Although there are potential pitfalls, in most cases is a great advantage to the injured worker to be able to pursue a third-party claim. Workers compensation systems pay temporary total disability or time lost benefits based on a percentage of wages with a statutory maximum that can be recovered.  Third-party claims allow for a full recovery including wages, loss of fringe benefits, including health care benefits, pension contributions etc., bonuses, and other forms of compensation.  Third-party claims also include awards for general damages (pain and suffering, loss of the ability to enjoy life, etc.) which are not payable under workers’ compensation programs. Third-party claimants can recover for future loss of earnings or earning capacity which might not be collectible under workers compensation system depending on the nature of the injury or specifics of the worker’s compensation program.

Generally speaking, comparative negligence of the injured worker is not a bar to pursuing a third-party claim but rather would only serve to reduce the award based on the percentage of negligence attributable to the injured worker. Under Washington State law negligence of the injured worker’s employer or a coworker would also not reduce the recovery as the employer’s contribution is through the workers’ compensation system.

In conclusion, an injured worker or one who suffers an occupational disease who feels his or her condition was caused in whole or in part due to the negligence or other wrongful actions of someone other than his or her employer or co-worker should contact an attorney experienced in handling their party claims to discuss the potential of bringing an independent action against the third party.

Recorded Statement?

I have heard recently some injured workers are being told by their Employer’s TPA (third-party Administrators) that they have to give a recorded statement about their injury. If the worker refuses, they are told their claim will be denied or rejected.

 While it is true that an injured worker must cooperate in providing information about their injury it is NOT true that they must consent to a RECORDED statement.  An unrecorded conversation is fine, so is a written explanation. There is no requirement that the worker consent to a recorded statement in order to have their claim properly adjudicated.

 I am not exactly sure where this insistence for a recorded statement originates. It does not seem to be a problem with the Claims Managers at the Department. It seems to be with the TPAs for the self-insured employers, and even more so with the TPAs for the Retro Employers. These latter are shadow managing a claim which is technically managed by the Department. These Retro TPAs can be very aggressive. The less paid in benefits, the larger the Employers’ Retro refund (in very broad brush strokes). Some of these TPAs are out of state, although that is really no excuse for misrepresenting the law. This is most likely symptomatic of broader involvement in claims management with out corresponding oversight and required training. You’ll see more on these themes in the coming days.

 The message? Know your rights. If you’re not sure – ask.