Workers' Compensation Board Decides Third Party Settlement

Posted on Jul 30, 2014

This Oregon Workers' Compensation Board decision illustrates how “third-party” recoveries are distributed under the Oregon Workers’ Compensation system.

The Oregon Workers Compensation statute provides that if a worker suffers an injury while on the job, but due to the fall of somebody other than a coworker or the employer, that injured worker has a “third-party” claim. Under this system, the workers’ compensation carrier pays benefits. The injured worker then “elects” whether he or she wishes to pursue the claim directly against the third party, or surrender that right to the workers’ compensation carrier. In many cases, the injured worker will choose to pursue the claim because third-party claims allow for compensation that is not covered in a workers’ compensation claim.

In this case, the injured worker suffered injuries in a truck accident in another state, but was working for an Oregon employer. The injured worker hired an attorney out-of-state, and the case was resolved by settlement. There was a disagreement between out-of-state attorney and the employer on the amount of reimbursement for workers' compensation benefits provided. The out-of-state attorney held the full amount of the workers’ compensation lien in his trust account until the matter was resolved.

The Board, in deciding how to distribute the settlement funds, first determined that the Oregon Workers’ Compensation statute controlled how the money was distributed, even if the motor vehicle collision occurred out of state. After resolving that issue, the Board then decided that the statutory formula set out in the workers’ compensation statute represented a “just and proper” distribution of settlement proceeds. The Board did acknowledge that it could apply a different distribution, and that each case should be judged on its own merits. Nonetheless, the Board felt it was appropriate to distribute the settlement proceeds under the statutory formula.

Third Party claims are really two cases in one. First, you are dealing with the workers’ compensation claim, and there are potential disputes over medical and other benefits. Second, you are dealing with a claim against the third-party, and finally, you must work with the workers’ compensation carrier to resolve third-party liens. If you have a question about a third party claim, call us at 503-325-8600. We have extensive experience handling these kinds of cases.