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Workers’ Compensation Claim Vs. Third-party Liability

When you are injured in a workplace accident, recovering the maximum amount of money that you can is very important – the more money that you recover, the more able you will be able to pay for your medical bills, support yourself and your family if you are unable to work, and seek the best treatment possible for your injuries.

Workers’ compensation insurance does not always pay you for all of the forms of harm that you have suffered. In fact, workers’ compensation insurance, and discussed in detail above, is only designed to pay for medical expenses, lost wages, and death benefits. Often times, though, a worker suffers injury types that extend well beyond this.

While the workers’ compensation system prevents injured workers from filing a lawsuit against their employer, the law does not prevent workers from filing a third party liability claim for damages. These claim types are civil actions that seek to hold a third party (someone other than a co-worker or an employer) liable for the worker’s injuries. Because these claims are filed outside of the workers’ compensation system, when successful, they can yield very high damages amounts.

Who Can Be Held Liable in a Third Party Liability Claim?

A party whose negligence is the direct cause of your workplace injury, and is not your employer nor a fellow employee, may be held liable in a third party liability claim for damages. This can include, but is not limited to:

  • The property owner of the site where your accident took place;
  • The driver of a vehicle who hit you;
  • The manufacturer of a defective piece of equipment or machinery; or
  • The shipper of a dangerous items.

For example, a property owner of the site where your accident took place, assuming the property owner is not your employer, may be held liable for your injuries if you can prove that the property owner’s failure to maintain the property in a reasonable safe condition was the direct cause of your injuries (i.e. the property owner failed to repair a hole in the property, of which you were unaware and fell into). Of, the driver of a vehicle may be held liable if, for example, you were a worker on a highway construction site when a negligent driver swerved into the construction site area, hitting you and causing serious injuries. In some cases, you may be able to hold more than one party liable. For example, if in the example above the accident occurred because the driver’s brakes were defective, then you may be able to file a claim against the driver and the manufacturer of the vehicle’s brakes and the dealer who sold the car with a defect.

What Types of Damages Are Available in a Third Party Liability Claim?

The damages that are available in a third party liability claim are different than are those that are available in a workers’ compensation claim. In addition to compensation for your medical expenses, you are also eligible to seek damages for all your lost wages (rather than just 66 percent of them), all other financial losses, and your pain and suffering. If your accident causes permanent disability or impairment, then you may also seek damages for loss of future earning potential, loss of quality of life, and loss of value of other benefits (like a pension).

You may also be able to seek punitive damages in a third party liability claim, which are not permitted in workers’ compensation claims. Punitive damages are damages that are paid specifically to punish the defendant for particularly egregious actions. If the negligence of the defendant was gross and outrageous, he or she may be ordered by a court to pay you punitive damages.

Is the Statute of Limitations Different?

Yes – the statute of limitations for filing a third party liability claim is different than is the statute of limitations for filing a workers’ compensation claim. While for the latter you must file your workers’ compensation claim with the Industrial Commission of Arizona within one year of the date of your injury, you have two years to file your third party liability claim in civil court. If you do not file your claim within two years’ time, then you will be permanently barred from recovering compensation for your injury.

What Will I Need to Prove?

There are four elements of a third party liability claim that you will need to prove in order to recover compensation for your injuries. Remember, the workers’ compensation system is a no fault system, where all that you need to prove is that you have sustained injuries. This is not the case for a third party liability claim; instead, you will need to prove the following elements:

 

 

  • Existence of duty of care. The first thing that you will need to prove is that a duty of care existed between you and the party against whom you are filing suit. For example, the driver of a car has a duty to operate the car carefully; the manufacturer of a product has a duty to manufacture a product that is safe for use; the owner of a property has a duty to maintain his or her property in a safe condition.

 

 

  • Breach of duty of care. The second thing that you need to prove is that the party against whom you are filing suit violated the duty of care owed to you. This is also known as proving negligence, and asserts that the at-fault party acted in a manner that was unreasonable when compared to what a normal person in the same circumstance would do. Defectively designing a product, failing to repair a known hazard on a property, driving drunk, etc. are all examples of negligence that may be relevant to your claim.

 

 

  • Causation. The third component of a third party liability claim is demonstrating how the breach of the duty of care was the cause of your accident. Even if you can prove negligence, if you cannot prove causation, your claim will not be successful. In other words, you must prove that your injuries would not have been incurred but for the actions of the at-fault party.

 

 

  • Damages. The final component of a third party liable claim is proving that you actually suffered damages, and therefore deserve to be compensated. Damages include medical bills, financial losses, an injury, emotional suffering, psychological harm, etc.

 

All of these elements must be established for your claim to move forward. Typically, proving breach of duty of care and causation are the two most complex elements to prove, and often require the intervention and assistance of a legal professional.

Can I File a Workers’ Compensation Claim and a Third Party Liability Claim?

Yes, if your injuries warrant both a workers’ compensation claim and a third party liability claim, then you can file both case types. However, be aware that you are not allowed to “double-dip” in terms of benefits recovered. I.e., you cannot recover medical expenses in both a workers’ compensation case and a third party liability claim for the exact same medical costs. If your workers’ compensation insurance pays your medical bills, and then later you decide to file a third party liability claim and are successful, you will have to pay back the insurance company.

As a brief note, there are some instances where you are permitted to file a civil claim directly against your employer or a co-worker. This is permitted instances where your injuries would not have occurred but for the wanton and willful conduct of the at-fault party. In other words, if your employer intentionally caused you harm, for example, assaulting you, then you can file a claim against him or her.

 

What If My Employer/Boss Will Not Report My Injury?

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