What is a Third Party Settlement in a Pennsylvania Workers’ Compensation Case?
If you are afflicted with an occupational illness or suffer an on-the-job injury, you might be aware of your right to pursue workers’ compensation benefits. The workers’ compensation system provides a “no fault” basis to seek free medical care, partial wage replacement, and compensation for permanent disability. A claim for these benefits constitutes an exclusive remedy against an employer for work-related injuries and illnesses. This exclusive remedy is far more limited than the damages available through a personal injury lawsuit, such as pain and suffering, punitive damages, and loss of consortium. However, these damages can be sought through a third party settlement against a party other than an injured worker’s employer.
Although an employer is immune from liability in a personal injury lawsuit brought by an employee even in cases of extreme negligence, access to the broader range of damages available in a civil lawsuit might be sought against a third party defendant. If your injury is caused partially or totally by a party other than your employer or co-worker, you can pursue a settlement or judgment against the third party while also pursuing workers’ compensation benefits against your employer.
This dual approach which involves pursuing a lawsuit against a third party and workers’ compensation benefits against an employer provides the best of both worlds. The injured worker can obtain prompt access to medical benefits and wage replacement through the workers’ compensation system without the challenge of proving negligence. The employee also can pursue a civil lawsuit for damages against a third party to obtain types of compensation unavailable through the workers’ compensation system. The injured employee will have a legal duty to establish liability in the lawsuit which will typically be based on the negligence of the third party. Negligence refers to the failure to exercise ordinary care to avoid causing foreseeable injury to another. However, there are situations where a third party can be liable based on strict liability (i.e., liability without fault) depending on the circumstances.
Third party settlements can be pursued against a broad range of third parties. For example, a roofer injured on a construction site might pursue a third party lawsuit against many parties that include land owners, general contractors, sub-contractors, architects, manufacturers of tools, material suppliers, equipment rental companies, and others performing work or supplying materials and/or equipment. For example, an employee might be struck when a co-worker backs up a tractor. The tractor might have a defective component that prevents the vehicle from stopping if proper maintenance is not performed. A claim can be filed against the employer’s workers’ compensation carrier because a co-worker caused the on-the-job injury. The company that manufactured the faulty brake system component and/or tractor might be liable based on product liability law for producing a defective vehicle. Further, the company that services the tractor might owe damages for negligently maintaining the tractor.
When an employee brings a third party lawsuit, the employer often will benefit because a lien will be created in favor of the employer for workers’ compensation benefits paid to the employee. The right of the employer to receive reimbursement for workers’ compensation benefits out of the third party lawsuit is referred to as “subrogation.” Because of the impact of subrogation and the potential to obtain more extensive recovery in a third party lawsuit, employees who suffer a workplace injury should seek legal advice promptly to develop a strategy to pursue the fullest recovery.
Our experienced Pennsylvania workers’ compensation attorneys at the law firm of Krasno, Krasno & Onwudinjo meticulously evaluate our clients’ situation to determine whether a third party lawsuit can be pursued along with a claim for workers’ comp benefits. We invite you to call us at toll free at (877) 299-0779 to learn how we can help.