WORKER'S COMPENSATION AND THIRD PARTY CLAIMS

By

MATTHEW B. TOZER
Attorney at Law

If, due to an incident, you, as an employee, were injured on the job, you have certain rights and remedies under Worker's Compensation law.

However, if you’re on-the-job injuries were caused by a person who was not your employer or a fellow employee, you have certain rights and remedies under California "Tort" law. 

 A "tort" is a civil wrong, such as, for example, a negligently caused automobile collision, that is generally not a crime or a contract.

WORKERS' COMPENSATION

Worker's Compensation law is generally a "no-fault" system.  Under Worker's Compensation law, "fault" does not determine whether payments are made or not.  The only major condition is that you were injured on the job. Thus, you are entitled to Worker's Compensation benefits even if you were somehow found to be at fault.  But there must be an on-the-job injury.  

Worker's Compensation benefits generally include expeditious payments of medical expenses, temporary disability, and, at the end of the case, a lump-sum permanent disability payment.  Other benefits may apply in some cases.  But there is NO pain and suffering damages in Worker's Compensation cases.

TORT LAW

Under Tort law, you may make a claim against a person who caused or is otherwise legally responsible for your injuries and damages (except, in most cases, not against your employer or fellow employee).  But you must, in most cases, prove negligence or fault (unless strict liability applies) against the person who caused your injuries.  Further, if you are partly at fault in causing your own injuries, under Tort law, any recovery is reduced in proportion to the amount you are at fault.  For example, if you were 35% at fault in causing your injuries, your recovery is reduced by 35% in Tort cases.

Under Tort law, damages include payment of reasonable and necessary medical expenses, all loss of earnings, disability, as well as pain, suffering and inconvenience.  Pain, suffering and inconvenience damages are often a very substantial part of any recovery in a tort case.

THREE CHOICES

If you are injured on the job, but you are injured by someone who is not your employer or fellow employee, then you can normally make one of three choices:

1.   Present a Worker's Compensation claim against your employer. 

2.   Present a Tort claim against the person who injuried you or is legally responsible for injury to you (and who is not an employer of fellow employee).

 3.   Present BOTH a Worker's Compensation claim AND a Tort Claim.

For both your personal injury Tort claim and the "Worker's Compensation" claim, you are entitled to a recovery for certain damages.  See the chart below:

TORT DAMAGES	WORKER'S COMPENSATION DAMAGES
Reasonable and Necessary Medical Bills (paid at the end of the case)	Reasonable and Necessary Medical Bills (paid as incurred)
Full Loss of Earnings (paid at end of case)	Partial Loss of Past Earnings in most cases (paid promptly)
Permanent Disability (also called "loss of capacity") (Job Retraining if necessary) Often difficult to prove in Tort claims	Permanent Disability (also called "loss of capacity") (Job Retraining if necessary) Easier to prove in Worker's Compensation cases
Pain and Suffering and inconvenience and lifestyle impairment	None

As you can see, "Tort" claim damages and "Worker's Compensation" claim damages are almost the same in many respects.  But because Worker's Compensation is a no-fault system, it does not offer damages for "pain and suffering" and the like.

By bringing both a "Tort" claim and a "Worker's Compensation" claim at the same time, it appears that you would get paid twice for medical bills and disability.  But the law, in most cases, does not allow for a "double recovery" bonus.  The law states that the Worker's Compensation insurance company can recover the money they paid to you from your Tort" settlement or verdict.  Thus, in most cases, there is NO "double recovery" by bringing both a "third party" claim and a "Worker's Compensation" claim at the same time.

REASONS TO PURSUE BOTH A WORKERS' COMPENSATON AND TORT CLAIM

Nevertheless, there are numerous reasons for a personal injury client to consider pursuing both a Worker's Compensation claim and a third party Tort claim. 

First, Worker's Compensation benefits may be payable without proof of wrongful conduct, i.e. "fault".  In other words, Worker's Compensation benefits are payable without having to prove or disprove fault by anybody.  Thus, payments of Worker's Compensation benefits are secured whereas payments in a Tort cases are not. 

Second, although, based on the known facts of your case at present, it might appear that you have a strong case of liability (fault) against the person(s) who caused your injuries, nevertheless, there might be facts, not yet known to you or your attorney, that may somehow shield the such person(s) from full or partial fault and, thereby escape responsibility from paying on your claim. 

Additionally, in a few Tort cases, even though liability is proven, nevertheless, the injury portion of the case can take a turn for the worst. 

Thus, any Tort claim carries an element of risk and potential surprise that could potentially alter the initial assessment of the chances of a successful result in your Tort case. 

Consequently, by instituting a Worker's Compensation claim, you would normally be guaranteed at least some payment for your medical bills and disabling injuries.

Moreover, the Worker's Compensation judges and insurance companies more regularly pay out benefits for certain types of injuries that civil juries and arbitrators are often reluctant to recognize.  For example, it is generally more likely that you will recover damages for "loss of earning capacity" (also called "permanent disability") in a Worker's Compensation claim than in a Tort claim, particularly in the settlement negotiation stages. 

Additionally, pursuing Worker's Compensation claim normally assures that the injured worker will normally receive both early and prompt payment of medical bills and partial loss of earnings called "temporary disability."  In contrast, such medical and loss of earnings payments in Tort cases normally come at the end of the case, assuming that fault against the other driver is proven.