Third Party Claims in General in Louisiana Workers Compensation

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What Are Third-Party Claims and Underlying Personal Injury Claims in Louisiana Workers Compensation?

Sometimes, an employee is injured while at work due to the actions of someone other than the employer or co-worker.

In such a situation, the injured employee will likely have a workers compensation claim AND a "third-party claim" against the individual (other than the employer or co-worker) who was responsible for the accident or the injury.

Many times, this "third-party claim" is, in fact, a separate personal injury claim.

And often, this separate personal injury claim is known as an "underlying personal injury claim" because this personal injury claim lies underneath the workers compensation claim.

Under Louisiana's “exclusive remedy rule,” an injured employee is not allowed to sue the employer (or co-workers) for damages such as pain and suffering; an employee may only obtain lost wage benefits and medical benefits for the employer's workers compensation insurance company.

However, an injured employee can sue third parties (individuals and companies besides the employer or its co-workers) for damages such as pain and suffering.

But both the employee, the employer, and the workers compensation insurance company may have valid claims against the third party.

Examples of Typical Third-Party Claims 

Typical examples of situations in which an injured employee may have a workers compensation claim and a third-party claim include the following: 

    • An on-the-job car or truck accident in which another motorist (besides the employee) was at fault;
    • A slip-and-fall or a trip-and-fall accident that occurred on someone else's property;
    • A construction site accident caused by a subcontractor, supplier or utility company;
    • A workplace fire caused by dangerous chemicals; and
    • A workplace accident caused by defective equipment or machinery.

Nonetheless, the most frequent situations in which an injured employee has a workers compensation claim and a third-party claimer the on-the-job car or truck accidents in which another motorist (besides the employee) was at fault.

Third-Party Claims in Workers Compensation Motor Vehicle Accidents in Louisiana Workers Compensation

Unfortunately, accidents that happen going to or from work from home  - or otherwise known as commuting - generally are not covered by Louisiana workers compensation because an employee who is commuting to or from work is not in the course of his or her employment.

This general rule - sometimes called the “coming and going rule” - is so well accepted that in order for the employee to succeed in his or her case, the employee must show that he or she falls under an exception to this rule.

But there are certainly exceptions to the “coming and going rule.”  These exceptions include the following circumstances:

    1. If the operation of a motor vehicle is one of the employment duties of the employee.
    2. If the employer pays the employee for travel time, provides a company car, or reimburses the employee for travel costs.
    3. If the employee is injured traveling from one work site to the next.
    4. If the employee is injured traveling (even from home) with some duty, which he must perform for the employer en route.
    5. If the accident happens on the employer's premises.
    6. If the employee was injured at a dangerous place adjacent to his employer's location (also known as the threshold doctrine). 

And again, workers compensation covers all work-related duties. For an on-the-job car or truck accident, this includes activities such as:

    • Performing a job that involves or requires driving as a duty of the job position;
    • Performing a job that has no fixed office location, but involves traveling for work, and ;
    • Performing a job that involves making deliveries of supplies or products;
    • Traveling when transportation is provided by the employer;
    • Traveling to attend a meeting with a client or a work-related conference;
    • Transporting a co-worker to a meeting or other work-related event; and
    • Traveling to perform an errand requested by the employer or a superior.

So if an employee is involved in an on-the-job car or truck accident, and the accident was not the employee's fault, the employee will likely also have a third-party civil personal injury claim against the driver who caused the incident.

In such a such, the injured employee can pursue both workers compensation benefits and a civil claim and should do so in order to maximize recovery.

Typically, the employee will recover lost wages and medical benefits on the workers compensation claim, and property damage (such as vehicle repairs) and pain and suffering damages on the third-party civil personal injury claim.

However, once in cured employed receives a personal injury settlement for such an on-the-job car or truck accident, the workers compensation insurance company will likely have a lien on those funds to seek repayment of the benefits that the employee received for medical care and lost wages.

But the workers compensation insurance company will not have a right to any of the other funds, such as the funds recovered fir property damage (such as vehicle repairs) and pain and suffering damages. 

Who Exactly is a Third Party in Louisiana Workers Compensation?

Since the employee is entitled to proceed against a “third person” for tort damages, and the employer or the insurance company is entitled to proceed against a “third person” for reimbursement of compensation paid, then it is important to know who a “third person” is for these purposes.

The following are NOT third persons as to the employee, and they are thus immune from a proceeding in tort: 

    • The employee's actual employer; 
    • The employee's co-workers, under that same employer, including supervisory employees or executive officers; 
    • Any principal (statutory employer) as to the employee;
    • Any employees of a principal; 
    • A partner, if the employee is employed by a partnership; and
    • An officer, director or stockholder of the employee's employer or any principal.

However, this immunity does not extend to protect:

    • Any of the above persons against their liability “resulting from an intentional act;”
    • Any officer, director, partner, stockholder, or employee of a principal or employer or who is “not engaged at the time of the injury in the normal course and scope of his employment;” or
    • A partner whose partnership has been formed for the purpose of evading workers compensation liability.

Moreover, a “third person” in Louisiana workers compensation will ordinarily be a person or entity outside the broad employment situation altogether, such as:

    1. Another driver in a vehicular accident;
    2. The manufacturer of a defective product; or
    3. A customer of the employer.

But some persons related in various ways to the employment picture may still be considered third persons, such as the employees of a contractor, who must be considered as third persons as far as the employees of a principal are concerned.

This concept is often termed as being able to “sue down” but not being able to “sue up.”

Also, if a person ordinarily a co-employee of the injured employee (and thus immune from a tort suit) becomes the borrowed employee of another employer, it can be argued that the immunity of this co-employee is lost (unless that other employer is a principal).  

An Uninsured Motorist Insurance Carrier Is Not A Third Person in Louisiana Workers Compensation

If an employee is injured in a compensable accident but is prohibited from suing his or her employer or a co-employee in a personal injury tort lawsuit, it can be argued that the employer or co-employee is a person from whom the employee is “legally entitled to recover damages” but who is “uninsured” in the sense that the employee cannot recover anything from him.  

However, Louisiana courts have consistently ruled that an injured employee is not entitled to recover from an uninsured motorist carrier providing coverage either to the employer or co-employee, or to the injured employee himself or herself.

In other words, an Uninsured Motorist insurance company or carrier is not considered a "third person" for Louisiana workers compensation claims.

The third-party tort action allowed under Louisiana law is intended to permit the injured employee to seek tort recovery against persons genuinely outside the employment family altogether.

But Louisiana law does not allow the injured employee any additional tort recoveries against the employer or co-employee beyond those expressly provided (such as for an intentional act). 

The Louisiana Statutes for Third-Party Claims in Louisiana Workers Compensation

The primary Louisiana statutes regarding third-party claim in workers compensation are La. R.S. 23:1101, La. R.S. 23:1102, La. R.S. 23:1103, La. R.S. 23:1104, La. R.S. 23:1032,  and La. R.S. 23:1205, which read as follows:

§1101.  Employee and employer suits against third persons; effect on right to compensation

A.  When an injury or compensable sickness or disease for which compensation is payable under this Chapter has occurred under circumstances creating in some person (in this Section referred to as "third person") other than those persons against whom the said employee's rights and remedies are limited in R.S. 23:1032, a legal liability to pay damages in respect thereto, the aforesaid employee or his dependents may claim compensation under this Chapter and the payment or award of compensation hereunder shall not affect the claim or right of action of the said employee or his dependents, relations, or personal representatives against such third person, nor be regarded as establishing a measure of damages for the claim; and such employee or his dependents, relations, or personal representatives may obtain damages from or proceed at law against such third person to recover damages for the injury, or compensable sickness or disease.

B.  Any person having paid or having become obligated to pay compensation under the provisions of this Chapter may bring suit in district court against such third person to recover any amount which he has paid or becomes obligated to pay as compensation to such employee or his dependents.  The recovery allowed herein shall be identical in percentage to the recovery of the employee or his dependents against the third person, and where the recovery of the employee is decreased as a result of comparative negligence, the recovery of the person who has paid compensation or has become obligated to pay compensation shall be reduced by the same percentage.  The amount of any credit due the employer may be set in the judgment of the district court if agreed to by the parties; otherwise, it will be determined pursuant to the provisions of R.S. 23:1102(A).

C.  For purposes of this Section, "third person" shall include any party who causes injury to an employee at the time of his employment or at any time thereafter provided the employer is obligated to pay benefits under this Chapter because the injury by the third party has aggravated the employment related injury.

D.  Repealed by Acts 2005, No. 267, §2.

Acts 1976, No. 147, §2; Acts 1985, No. 931, §1; Acts 1989, No. 454, §4, eff. Jan. 1, 1990; Acts 1990, No. 973, §1; Acts 1997, No. 1354, §1, eff. July 15, 1997; Acts 2005, No. 257, §§1, 2.

§1102.  Employee or employer suits against third persons causing injury; notice of filing

A.(1)  If either the employee or his dependent or the employer or insurer brings suit against a third person as provided in R.S. 23:1101, he shall forthwith notify the other in writing of such fact and of the name of the court in which the suit is filed, and such other may intervene as party plaintiff in the suit.

(2)  Any dispute between the employer and the employee regarding the calculation of the employer's credit may be filed with the office of workers' compensation and tried before a workers' compensation judge.  However, any determination of the employer's credit shall not affect any rights granted to the employer or the employee pursuant to R.S. 23:1103(C).

B.  If a compromise with such third person is made by the employee or his dependents, the employer or insurer shall be liable to the employee or his dependents for any benefits under this Chapter which are in excess of the full amount paid by such third person, only after the employer or the insurer receives a dollar for dollar credit against the full amount paid in compromise, less attorney fees and costs paid by the employee in prosecution of the third party claim and only if written approval of such compromise is obtained from the employer or insurer by the employee or his dependent, at the time of or prior to such compromise.  Written approval of the compromise must be obtained from the employer if the employer is self-insured, either in whole or in part.  If the employee or his dependent fails to notify the employer or insurer of the suit against the third person or fails to obtain written approval of the compromise from the employer and insurer at the time of or prior to such compromise, the employee or his dependent shall forfeit the right to future compensation, including medical expenses.  Notwithstanding the failure of the employer to approve such compromise, the employee's or dependent's right to future compensation in excess of the amount recovered from the compromise shall be reserved upon payment to the employer or insurer of the total amount of compensation benefits, and medical benefits, previously paid to or on behalf of the employee, exclusive of attorney fees arising out of the compromise; except in no event shall the amount paid to the employer or insurer exceed fifty percent of the total amount recovered from the compromise.  Such reservation shall only apply after the employer or insurer receives a dollar for dollar credit against the full amount paid in compromise, less attorney fees and costs paid by the employee in prosecution of the third party claim.

C.(1)  When a suit has been filed against a third party defendant in which the employer or his insurer has intervened, if the third party defendant or his insurer fails to obtain written approval of the compromise from the employer or his insurer at the time of or prior to such compromise and the employee fails to pay to the employer or his insurer the total amount of compensation benefits and medical benefits out of the funds received as a result of the compromise, the third party defendant or his insurer shall be required to reimburse the employer or his insurer to the extent of the total amount of compensation benefits and medical benefits previously paid to or on behalf of the employee to the extent said amounts have not been previously paid to the employer or his insurer by the employee pursuant to the provisions of Subsection B of this Section.  Notwithstanding such payment, all rights of the employer or his insurer to assert the defense provided herein against the employee's claim for future compensation or medical benefits shall be reserved.

(2)  Nothing herein shall be interpreted to affect the rights of the employer or his insurer to otherwise seek reimbursement for past or future compensation benefits and medical benefits against a third party defendant or his insurer without regard to the actions of the employee on whose behalf said compensation and medical benefits were paid.

(3)  Repealed by Acts 1989, No. 454, §10, eff. Jan. 1, 1990.

Amended by Acts 1983, 1st Ex. Sess., No. 1, §1, eff. July 1, 1983.  Acts 1984, No. 852, §1; Acts 1985, No. 926, §1, eff. Jan. 1, 1986; Acts 1989, No. 454, §§4, 10, eff. Jan. 1, 1990; Acts 1997, No. 1354, §1, eff. July 15, 1997; Acts 2005, No. 257, §1.

§1103. Damages; apportionment of between employer and employee in suits against third persons; compromise of claims; credit

A.(1) In the event that the employer or the employee or his dependent becomes party plaintiff in a suit against a third person, as provided in R.S. 23:1102, and damages are recovered, such damages shall be so apportioned in the judgment that the claim of the employer for the compensation actually paid shall take precedence over that of the injured employee or his dependent; and if the damages are not sufficient or are sufficient only to reimburse the employer for the compensation which he has actually paid, such damages shall be assessed solely in his favor; but if the damages are more than sufficient to so reimburse the employer, the excess shall be assessed in favor of the injured employee or his dependent, and upon payment thereof to the employee or his dependent, the liability of the employer for compensation shall cease for such part of the compensation due, computed at six percent per annum, and shall be satisfied by such payment. The employer's credit against its future compensation obligation shall be reduced by the amount of attorney fees and court costs paid by the employee in the third party suit.

(2) No compromise with such third person by either the employer or the injured employee or his dependent shall be binding upon or affect the rights of the others unless assented to by him.

(3) Any dispute between the employer and the employee regarding the calculation of the employer's credit may be filed with the office of workers' compensation and tried before a workers' compensation judge. If a third party action has been filed in a district court, such dispute shall be filed in the district court and tried before a district judge unless the parties agree otherwise. However, any determination of the employer's credit shall not affect any rights granted to the employer or the employee pursuant to R.S. 23:1103(C).

B. The claim of the employer shall be satisfied in the manner described above from the first dollar of the judgment without regard to how the damages have been itemized or classified by the judge or jury. Such first dollar satisfaction shall be paid from the entire judgment, regardless of whether the judgment includes compensation for losses other than medical expenses and lost wages.

C.(1) If either the employer or employee intervenes in the third party suit filed by the other, the intervenor shall only be responsible for a share of the reasonable legal fees and costs incurred by the attorney retained by the plaintiff, which portion shall not exceed one-third of the intervenor's recovery for prejudgment payments or prejudgment damages. The amount of the portion of attorney fees shall be determined by the district court based on the proportionate services of the attorneys which benefitted or augmented the recovery from the third party. The employee as intervenor shall not be responsible for the employer's attorney fees attributable to postjudgment damages nor will the employer as intervenor be responsible for the attorney fees attributable to the credit given to the employer under Subsection A of this Section. Costs shall include taxable court costs as well as the fees of experts retained by the plaintiff. The pro rata share of the intervenor's costs shall be based on intervenor's recovery of prejudgment payments or prejudgment damages.

(2) When recovery of damages from a third party is made without filing of a suit, the employer shall be responsible for an amount, not to exceed one-third of his recovery on pre-compromise payments, for reasonable legal fees and costs incurred by the attorney retained by the employee or his dependent in pursuit of the third party matter. The responsibility for payment of this amount shall exist only if there is written approval of the compromise by the employer, his compensation carrier, or the compensation payor.

D. An insurer shall grant its insured a dollar-for-dollar credit for any amount on any claim paid pursuant to this Chapter on the employer's behalf and recovered in the current year, less any reasonable expenses incurred in the recovery by the insurer, in an action or compromise pursuant to this Section and R.S. 23:1102. The credit shall be used by the insurer in the calculation of the loss experience modifier promulgated by and in accordance with the rules of the National Council on Compensation Insurance, to be applied in determining the annual premium paid by the employer for workers' compensation insurance under this Chapter. The group self-insurance fund shall apply the loss experience modifier authorized by R.S. 23:1196.

Amended by Acts 1958, No. 109, §1; Acts 1989, No. 454, §4, eff. Jan. 1, 1990; Acts 1997, No. 53, §1; Acts 1997, No. 59, §1; Acts 1997, No. 1354, §1, eff. July 15, 1997; Acts 2016, No. 470, §1.

§1104.  Quantification of employer fault

In a suit brought pursuant to R.S. 23:1101, the fault of persons immune from suit in tort under R.S. 23:1032 shall be assessed as a percentage of the aggregate fault of all persons causing or contributing to the employee's injury, and the fault so assessed shall not be reallocated to any other person or party.  The recovery had in such a suit by the employer or any other person having paid or having become obligated to pay compensation shall be reduced by the fault so assessed.  This reduction is in addition to but not duplicative of any reduction made pursuant to Civil Code Articles 2323, 2324, and 2324.2 and R.S. 23:1101(B).

Acts 1996, 1st Ex. Sess., No. 15, §1.

§1032.  Exclusiveness of rights and remedies; employer's liability to prosecution under other laws

A.(1)(a)  Except for intentional acts provided for in Subsection B, the rights and remedies herein granted to an employee or his dependent on account of an injury, or compensable sickness or disease for which he is entitled to compensation under this Chapter, shall be exclusive of all other rights, remedies, and claims for damages, including but not limited to punitive or exemplary damages, unless such rights, remedies, and damages are created by a statute, whether now existing or created in the future, expressly establishing same as available to such employee, his personal representatives, dependents, or relations, as against his employer, or any principal or any officer, director, stockholder, partner, or employee of such employer or principal, for said injury, or compensable sickness or disease.

(b)  This exclusive remedy is exclusive of all claims, including any claims that might arise against his employer, or any principal or any officer, director, stockholder, partner, or employee of such employer or principal under any dual capacity theory or doctrine.

(2)  For purposes of this Section, the word "principal" shall be defined as any person who undertakes to execute any work which is a part of his trade, business, or occupation in which he was engaged at the time of the injury, or which he had contracted to perform and contracts with any person for the execution thereof.

B.  Nothing in this Chapter shall affect the liability of the employer, or any officer, director, stockholder, partner, or employee of such employer or principal to a fine or penalty under any other statute or the liability, civil or criminal, resulting from an intentional act.

C.  The immunity from civil liability provided by this Section shall not extend to:

(1)  Any officer, director, stockholder, partner, or employee of such employer or principal who is not engaged at the time of the injury in the normal course and scope of his employment; and

(2)  To the liability of any partner in a partnership which has been formed for the purpose of evading any of the provisions of this Section.

Amended by Acts 1976, No. 147, §1; Acts 1989, No. 454, §2, eff. Jan. 1, 1990; Acts 1995, No. 432, §1, eff. June 17, 1995.

§1205.  Claim for payments; privilege of employee; non-assignability; exemption from seizure; payment of denied medical expenses

A.  Claims or payments due under this Chapter shall have the same preference and priority for the whole thereof against the assets of the employer as is allowed by law for any unpaid wages of the laborer; and shall not be assignable, and shall be exempt from all claims of creditors and from levy or execution or attachment or garnishment, except under a judgment for alimony in favor of a wife, or an ascendant or descendant.

B.  Any company which contracts for health care benefits for an employee shall have a right of reimbursement against the entity responsible for the payment of workers' compensation benefits for such employee if the company paid health care benefits for which such entity is liable.  The amount of reimbursement shall not exceed the amount of the entity's liability for the workers' compensation benefit.  In the event the company seeks recovery for such in conjunction with a claim against any other party brought by the employee, the company may be charged with a proportionate share of the reasonable and necessary costs, including attorney fees, incurred by the employee in the advancement of his claim or suit.

C.(1)  In the event that the workers' compensation payor has denied that the employee's injury is compensable under this Chapter, then any health insurer which contracts to provide health care benefits for an employee shall be responsible for the payment of all medical benefits pursuant to the terms of the health insurer's policy.  Any health insurer which contracts to provide health care benefits for an employee who violates the provisions of this Subsection shall be liable to the employee or health care provider for reasonable attorney fees and costs related to the dispute and to the employee for any health benefits payable.

(2)  The payment of medical expenses shall be recoverable pursuant to and in accordance with Subsection B of this Section.  However, if it is determined that the worker's compensation payor was responsible for payment of medical benefits that have been paid by the health insurer, the obligation of the worker's compensation payor for such benefits shall be to reimburse the health insurer one hundred percent of the benefits it paid.  If it is determined that the worker's compensation payor was responsible for payment of benefits and its denial of responsibility is determined to be arbitrary and capricious, then the health insurer shall also be entitled to recover legal interest on any benefits it paid, calculated from the date such benefits were due.

(3)  Any claim filed against the worker's compensation carrier by the health insurer or health providers in accordance with this provision shall not be subject to timely filing requirements, nor does prescription run until such time as the workers' compensation claim reaches a resolution by final judgment or settlement.

(4)  Any claim filed by a health care provider against a health insurer pursuant to this Section shall be filed no later than one hundred eighty days after the denial by the worker's compensation payor.

Acts 1995, No. 449, §1; Acts 2004, No. 554, §1. 

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