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Workers’ Compensation Claims vs. Third-Party Liability

It can be very confusing to those who are injured or become ill on the job to understand whether they have a traditional workers’ compensation claim, or a personal injury claim in civil court. Sometimes, you can actually have both types of claims at the same time.

Pursuant to Florida Statute 440.39, entitled “Compensation for injuries when third persons are liable” if an employee is injured or killed in the course of his or her employment due to the negligence or wrongful act of a third party, the injured employee or the heirs to the decedent can accept workers’ compensation benefits while also pursuing an action at law against the third-party tortfeasor.

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This means that you have the right to maintain a workers’ compensation claim and a third-party negligence claim simultaneously. However, if you recover from the third-party tortfeasor who acted negligently or intentionally towards you, then you will have to pay back the employer or the insurance carrier for the workers’ compensation you were paid. This is because you are not allowed to make a windfall recovery, or double recovery, even with two separate causes of action. The goal is to make you whole, not provide you with a windfall.

Maintaining Two Causes of Action

That statute explains that once an employee or the dependents of a deceased employee accept other compensation or benefits or begins proceedings to do so, the employer or the employer’s insurer is subrogated to the rights of the employee or the employee’s dependents against the third party, up to the amount of benefits paid or to be paid.

In practice then, if the injured employee or his or her dependents go on to recover from a third-party tortfeasor either by settlement or judgment, whether before or after a lawsuit is filed, and before the employee has accepted compensation or other benefits, the amount that is recovered from the tortfeasor will be offset by any compensation benefits outside of the recovery for remedial care, attendance, and treatment.

There is some leeway for the injured party, and the amount of such offset is reduced by the amount of all court costs expended in the prosecution of the third-party suit or claim. This includes all costs expended on reasonable attorney fees for the injured party’s attorney. There is a formula in the law that can be applied to determine the equitable amount to pay as payback to either the workers’ compensation carrier or to the employer.

Repayment Formula

In determining the pro rata share of the costs and attorney fees of the employer or insurance carrier, the law requires that the employer or carrier shall have deducted from its recovery (against you) a percentage amount equal to the percentage of the judgment or settlement which is for costs and attorney’s fees. This means that whatever portion of your third-party liability lawsuit is settled in exchange for attorney fees and costs is not part of any subrogated amount, and no portion of that part will be paid to the employer or workers’ compensation carrier.

Outside of this deduction, the employer or carrier is authorized to recover from the judgment or settlement 100 percent of what it has paid and the future benefits to be paid from the remaining recovery or settlement amount. In determining the proper amount of recovery for the employer or the insurance carrier, the court has discretion to reduce the recovery by any amount it deems equitable and appropriate under the circumstances.

What if the Injured Party Does Not Sue a Third-Party Tortfeasor?

If the injured employee or his or her dependents fail to bring suit against a third-party tortfeasor within one year after the cause of action has accrued, the employer, or the insurance carrier, after giving 30 days’ notice to the injured employee, the survivors, and the lawyer if applicable, can institute their own suit against a third party tortfeasor. If the employer does bring a lawsuit, they will be entitled to all amounts paid as compensation and medical benefits under the workers’ compensation provisions of Florida law, as well as to the present value of all future compensation benefits that are payable. If the employer prevails, the winnings must be retained in a trust fund where future payments of compensation to the injured employee are taken from, as well as court costs and attorney fees. Any other remaining money from the lawsuit is paid to the employee, or the dependents of the employee.

This is an extremely complex and nuanced area of the law, but the short answer is that yes, you can maintain two actions simultaneously; one sounding in workers’ compensation and another sounding in tort. If you are wondering whether or not you have two separate and viable claims, you should discuss your case with an Orlando attorney.

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