When Workers’ Comp Cases Include Third-Party Claims

Workers’ compensation benefits provide support for injured employees. They provide for medical expenses and wage loss benefits after a work-related injury. Many cases may also involve a third-party claim. Third party claims refer to lawsuits against entities other than the employer who may bear responsibility for the injury.

These claims can provide workers with additional compensation for damages not covered by workers’ compensation insurance. For example, pain and suffering or punitive damages.

This blog explores workers’ comp cases with third-party claims. We look at the impact of Pennsylvania’s Fair Share Act and how it compares to the prior system of joint and several liability.

Third-Party Claims In Workers’ Compensation Cases

How Often Do Third-Party Claims Arise?

Third-party claims arise often in workers’ compensation cases, particularly in:

• Construction Site Accidents: Often involve multiple contractors, subcontractors, and property owners, creating shared liability.
• Defective Equipment: A workplace accident caused by faulty tools or machinery can lead to claims against manufacturers or suppliers.
• Vehicle Accidents: Workers injured on the job while driving for work can file a claim against at-fault drivers.
• Toxic Exposures: Injuries caused by hazardous substances often lead to lawsuits against manufacturers or distributors.

Roughly 15-25% of workers’ compensation claims involve viable third-party claims. This may vary depending upon the industry and nature of the work. Such cases allow injured workers to seek compensation beyond workers’ comp benefits, such as pain and suffering.

Pennsylvania’s Fair Share Act & Its Role In Third-Party Claims

The Fair Share Act

The Fair Share Act, enacted in PA in 2011, introduced a proportional liability system. It redefined how parties allocate damages in personal injury cases and third-party claims. This Act replaced the previous joint and several liability framework.

Key Provisions

1. Proportional Liability: Defendants pay damages based on their percentage of fault, rather than covering the full amount. For instance, if a work injury involves three parties at fault (50%, 30%, and 20%), each defendant pays their share.
2. Exceptions For Joint Liability: Exceptions exist in specific cases, such as intentional harm, environmental hazards, or laws protecting minors. Courts can still hold defendants joint and severally liable for the total damages if their fault exceeds 60%.
3. Impact On Compensation Subrogation: The Fair Share Act affects damages when suing a third party while on workers’ comp. The fault allocation reduces any recovery from third parties. Insurance carriers may pursue a subrogation claim to recover benefits they paid.

How The Fair Share Act Impacts Third-Party Claims In Workers’ Comp Cases

Proportional Recovery

Defendants pay damages based on their degree of fault. For example:

• A property owner found 40% at fault for a workplace accident would only pay 40% of the awarded damages.
• This reduces the burden on minimally at-fault defendants, but can limit the total recovery for the injured worker.

Subrogation By Workers’ Compensation Insurers

Workers’ compensation laws give insurance carriers providing workers’ compensation insurance the right to compensation subrogation. This allows them to seek pay back from third-party recoveries for benefits paid to the worker. This interplay can reduce the total amount the injured worker receives, as insurers recoup their costs first.

Encourages Broad Legal Strategy

Plaintiffs must carefully evaluate all potentially responsible parties and allocate fault accurately. Missing a liable party or failing to establish their fault can significantly reduce the damages recovered.

Comparing The Fair Share Act To Joint And Several Liability

Joint And Several Liability

Before the Fair Share Act, Pennsylvania used a joint and several liability system where:

• Any defendant found even 1% at fault may be responsible for the entire damages if others could not pay.
• Plaintiffs could recover full damages, even if one or more defendants lacked enough assets or insurance coverage.
• Defendants often bore disproportionate financial burdens, especially when minimally at fault.

How The Fair Share Act Differs

1. Proportional Liability: Defendants only pay their fair share of damages, based on fault percentage.
2. Reduced Burden On Defendants: Protection for minimally culpable parties from joint and several liability. Specific exceptions exist.
3. Limitations For Plaintiffs: Plaintiffs may face challenges recovering full damages if some defendants lack sufficient insurance or assets.

How The Fair Share Act Affects Both Personal Injury And Workers’ Comp Claims

Personal Injury Lawsuits

The Fair Share Act encourages detailed fault allocation, often requiring expert witnesses and thorough evidence. Plaintiffs must identify all responsible parties to maximize their recovery and avoid gaps in damages.

Workers’ Compensation Lawsuits

When an injured worker files a third-party claim alongside a workers’ compensation claim:

• The insurance company providing workers’ comp benefits may recover the benefits paid out through a subrogation claim.
• Injured workers must carefully navigate their claims to ensure they retain as much compensation as possible after subrogation.

Criticisms Of The Fair Share Act

The Fair Share Act has faced criticism for potentially limiting recovery for injured workers and plaintiffs.

• Limited Recovery For Plaintiffs: If a major defendant lacks sufficient assets or insurance, plaintiffs may not receive full compensation.
• Complexity: The system requires plaintiffs to allocate fault among all responsible parties accurately, making the cases more difficult.
• Subrogation Reductions: Workers’ compensation insurers often recover large portions of third-party awards, leaving less for the injured worker.

Why Understanding The Fair Share Act Matters

For workers injured on the job, knowing the PA’s Fair Share Act proves essential. Particularly in cases with third-party claims. The Act reduces the financial burden on minimally at-fault defendants. But, it creates challenges for plaintiffs seeking additional compensation.

Conclusion

Third-party claims provide opportunities for injured workers to recover damages beyond medical bills and lost wages. PA’s Fair Share Act distributes liability equitably based on fault. This offers protection to defendants, but introduces challenges for plaintiffs.

Injured workers should seek legal help when dealing with these claims. They require careful legal strategy, especially when factoring in compensation subrogation from insurance carriers. An experienced workers’ comp lawyer will help you find the right personal injury attorney for your third-party claim. They will work together, ensuring properly filed claims and maximum recovery.

If you have suffered a work injury and believe you may have a third-party claim, we can help. Reach out to our offices 24/7 for a free case evaluation (215) 609-4183. Let us get you the benefits you deserve.