Understanding Third-Party Claims

A third-party claim arises when an injury is caused by the negligence or wrongful act of a person or entity other than the employer. Examples include:

Vehicle Accidents: An employee is injured in a car accident while driving for work due to another driver’s negligence.

Defective Products: An employee is injured by defective machinery or equipment provided by a manufacturer.

Premises Liability: An employee is injured on another company's property due to unsafe conditions.


Benefits of Pursuing a Third-Party Claim

While workers' compensation provides benefits regardless of fault, it may not cover all damages such as pain and suffering. A third-party claim allows the injured worker to seek additional compensation, which can include:

Pain and Suffering:

Compensation for physical pain and emotional distress caused by the injury.

Loss of Consortium:

Compensation for the impact of the injury on the employee’s relationship with their spouse or family.

Full Wage Loss and Future Earnings:

Recovery of wages not fully compensated by workers' compensation, including future lost earnings.

Punitive Damages:

In some cases, the employee may seek punitive damages to punish the third party for particularly egregious conduct.

Handling Third-party Claims Concurrently With Workers' Compensation

Pursuing both workers' compensation and a third-party claim requires careful coordination to ensure all rights and benefits are maximized. Here’s how to handle these claims concurrently:

File the Workers' Compensation Claim:

Immediately report the injury to your employer and file a workers' compensation claim to receive immediate benefits for medical treatment and wage replacement.

Identify the Third Party:

Determine if a third party may be liable for the injury. This involves identifying all potential non-employer entities that could be responsible, such as drivers, manufacturers, or property owners.

Consult with an Attorney:

Seek legal advice from an attorney experienced in both workers' compensation and personal injury law. They can provide guidance on pursuing a third-party claim while managing your workers' compensation case.

File a Third-Party Lawsuit:

Your attorney will help you file a lawsuit against the third party. This lawsuit can proceed concurrently with your workers' compensation case.

Coordinate Benefits and Settlements:

Understand how the workers' compensation benefits and the third-party recovery will interact. Under California law, if you receive a settlement or judgment from a third-party claim, you may need to reimburse the workers' compensation insurer for benefits they have paid.
This reimbursement is governed by the principle of subrogation, allowing the workers' compensation insurer to recover the costs they’ve paid out from the third-party recovery.

Negotiate Liens and Settlements:

Work with your attorney to negotiate any liens from the workers' compensation insurer on the third-party recovery. A fair settlement should account for all damages while minimizing the impact of liens.

Manage Timing and Legal Procedures:

Ensure that both claims are filed and managed within the legal timelines. Workers' compensation claims and third-party lawsuits have different procedural requirements and deadlines.

Important Considerations

No Double Recovery: You cannot be compensated twice for the same damages. Coordination is necessary to ensure that compensation from both sources is appropriately allocated.

Legal Expertise: Handling both types of claims can be complex. Professional legal assistance is crucial to navigate the intricacies and maximize the benefits from both workers' compensation and third-party claims.

Impact on Workers' Compensation Benefits: Be aware that a significant recovery from a third-party claim may affect your workers' compensation benefits, including the requirement to reimburse the insurer for benefits paid.


For more information on handling third-party claims with workers' compensation cases, you can refer to:

This memo provides an informational guide to understanding Third Party claims under California's workers' compensation system and it is not intended as legal advice. For any specific legal advice or assistance, please contact our highly competent and knowledgeable attorneys.