New Jersey’s workers’ compensation system is meant to provide much-needed medical care and other benefits to workers who have been injured on the job. To make the process faster and easier, the system does not require an injured worker to prove that their employer was negligent; so long as the injury occurred in the course of their employment, they should be covered.
There’s a tradeoff for that arrangement: If an injured person collects workers’ compensation benefits after an accident at work, they cannot also file a personal injury lawsuit against their employer involving the same accident. This is true even if their accident was caused by the employer’s negligence.
But what if the accident was caused by someone else? Can an injured worker file a personal injury suit against a third party whose negligence caused their injury?
The short answer to this question is yes. This type of case is sometimes known as a third-party claim.
These claims can help injured people maximize their compensation after a workplace accident, but they come with some tradeoffs of their own.
Third-party claim example
To explain how third-party claims work, it may be helpful to explore an imaginary example from the construction industry. Large construction projects often have multiple employers working at one site in conditions that can lead to accidents.
Alex, who works for XYZ Plumbing, is working on a construction site when an improperly installed beam falls and injures him. He requires medical attention and misses three weeks of work. He files a workers’ compensation claim with his employer.
Through the workers’ compensation system, XYZ Plumbing’s insurance company pays for Alex’s medical care and provides him with a percentage of his income while he is unable to work.
However, the workers’ compensation benefits can’t compensate Alex for everything he has lost. He files a personal injury lawsuit against the construction company whose negligence caused his injury.
Here’s where the tradeoff comes in: If an injured worker receives workers’ compensation benefits and compensation in a third-party claim, their employer and/or the employer’s insurance company receive credits for the workers’ compensation benefits they already provided.
In other words, the money the injured worker receives through a third-party claim goes first to their employer and/or the employer’s insurer to compensate them for the amount they paid in workers’ compensation benefits.
How much does the employer take? Typically, the employer and/or insurer takes about two-thirds of the award.
On the bright side, this means an injured worker can potentially increase their total recovery by a third, or possibly more.