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1994 SESSION

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HB 1279 Workers' compensation.

Introduced by: Ward L. Armstrong | all patrons    ...    notes | add to my profiles

SUMMARY:

Workers' compensation; suspension of benefits following recovery from third party. Establishes a formula for apportioning attorney's fees and expenses between an employer and employee. Such apportionment is prescribed in connection with workers' compensation claims made by an employee subsequent to a third-party recovery to which his employer is subrogated. The apportionment formula is applicable if (i) the employee's third-party recovery exceeds the employer's then-existing compensation lien (ii) the employer's obligation to pay compensation benefits (but not its liability for benefits) is suspended until future accrued claims equal such excess and (iii) the employee seeks further compensation benefits during the benefit payment suspension period. The bill requires the employer to pay the employee a percentage of each claim for medical, surgical and hospital expenses as it is submitted equal to the ratio the total attorney's fees and costs (incurred in obtaining the third-party recovery) bear to the total third party recovery.

Under current law, if an employee sustains a job-related injury caused by the actions of a third party, he may concurrently (i) file a claim for workers' compensation benefits and (ii) commence a civil action against the third party causing his injuries. If a court awards the employee civil damages and enters a corresponding judgment against the third party (or if there is a settlement), the employee's employer is entitled to reimbursement (indemnity) from that judgment or settlement for all workers' compensation payments made to the employee in connection with the injury. The employer is also entitled to indemnity from that same award for any future workers' compensation claims the employee may make relating to the same injury.

The employer is, however, generally obligated by statute to share in the costs and attorney's fees incurred by employee in obtaining the judgment or settlement. Current law does not, however, specify how such costs and attorney's fees are to be apportioned vis-a-vis compensation claims made by an employee during a period in which the employer's obligation to pay benefits is suspended because of a third-party recovery (as described above). The bill effectively requires the employer to pay incrementally for the benefit of third-party indemnification concurrent with the employee's submission of claims for medical, surgical and hospital expenses during the benefit payment suspension period.


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