What If worker compensation payments are not enough

Once upon a time, during the industrial revolution, workers who were seriously hurt on the job had a good chance of being unable to use the justice system to be compensated for their injuries. The result was often economic catastrophe for their families. The main reason for the harsh results, during a period when worker safety was routinely sacrificed for profit, were three doctrines of tort law, known as "contributory negligence," the "fellow servant" rule, and the principle of "assumption of risk." These three rules usually guaranteed failure when the injured worker sued his employer.

Under the principle of contributory negligence, the worker would lose if he had contributed in any way to his injury. Even more devastating than contributory negligence was the fellow servant rule. Under this defense-friendly rule, an employer was not liable to the injured worker if a co-employee contributed in any way to the incident causing the injuries. Perhaps the principle most unfair to workers was assumption of risk. In most cases, workers were assumed to know and accept the risks inherent in their jobs. It was very difficult for a worker who filed a lawsuit against his employer to convince a jury that the employer's negligence was so severe that it overcame the worker's "assumption of the risk."

Eventually, lawmakers came to understand the unfairness of requiring severely injured workers to file lawsuits that they were likely to lose, to have any chance at compensation. As a result, the worker's compensation system, now universal in all 50 states, evolved. It is justifiably considered one of the great pro-labor achievements of the twentieth century. Worker's compensation, however, is something of a Devil's bargain. When a worker is injured on the job, he is entitled to compensation for wages lost due to his injuries, regardless of who was at fault. In exchange for that assurance, however, the worker cannot sue his employer. The amount of compensation is controlled by legislation and is utterly inadequate to make up for wages lost when a worker's injuries result in a long period or permanent inability to work, or in death.

A family faced with death or catastrophic injury to a wage earner from a workplace injury, will want to know if there is any way to make up for the inadequacy of worker compensation payments. Fortunately, the answer is often "yes." While an injured worker cannot sue his employer for negligence, the worker retains his right to sue any other party whose negligence contributed to his injuries. A common example is a worker employed by a subcontractor, working on a large construction site, who is badly hurt due to an unsafe condition. Often, the general contractor has overall responsibility for the safety of the site. In such a situation, the injured worker can sue the general contractor, even though he is barred from suing his own employer. Such lawsuits are called "third party actions" and are common in workplace accidents resulting in catastrophic injuries.

Third party actions are complicated by the fact that the workers compensation insurer for the worker's employer, has a statutory lien on the proceeds of any third party recovery. For example, if the insurer paid the worker $100,000 in worker compensation, and the worker sued a third party, the employer's insurer would be entitled to the first $100,000 of the worker's recover in the third party action (attorney's fees excluded). In real world practice, the workers compensation insurer usually agrees to take substantially less than 100% of their lien so that there is an incentive for the worker's attorney to settle the third party action. The only way for the family of a worker severely injured on the job to avoid financial ruin, is through a successful third party action. Any attorney representing a seriously injured worker has an obligation to thoroughly investigate the viability of a negligence lawsuit against a party other than his client's employer.

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