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Third-Party Negligence Claims

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Chapter 97 of the North Carolina General Statutes is the Workers Compensation Act. This law controls all aspects of worker’ compensation claims. When a North Carolina employee is entitled to workers’ compensation benefits for an injury that occurred while working and the injury was caused by a negligent third-party, the employee that has been injured may sue the third-party. This third-party claim can be in addition to the benefits recovered through the workers’ compensation claim.

The third-party is a person or a company who is the employee’s employer or one its other employees. In essence, while an employee cannot sue his or her own employer for its negligence or the negligence of a co-employee, the employee may sue a company unrelated to the employer.

One of the most common on-the-job injuries are those that are caused by a third-party’s negligent driving. For example, assume that  a delivery driver is rear-ended while making delivers. In that situation, the delivery driver is entitled to worker’s compensation benefits, but he can also sue the person who hit him and recover from that person’s automobile insurance company. This is important because some damages such as compensation for physical pain and mental suffering are not available through a North Carolina workers’ compensation claim.

Another common example of a typical third-party claim arises out of construction sites. If, for example, an employee of one sub-contractor, the electrical subcontractor, is injured through the negligence of an employee of another sub-contractor, the plumbing sub-contractor, the electrical sub-contractor employee can sue the plumbing sub-contractor and its employee for negligence. The plumbing sub-contractor’s commercial general liability insurance policy will generally provide coverage for these types of claims.

If the injured employee makes a recovery against the third party, the rights of the employee and employer are governed by the provisions of N.C.G.S 97-10.2. This statute provides that the employer has a workers’ compensation lien against the recovery from the third-party in an amount equal to all benefits paid by the employer’s workers’ compensation insurance carrier.

Neither the employee or the employer shall make any settlement with or accept any payment from the third-party without written consent of the other.

The workers’ compensation lien can be resolved by one of three ways.

  1. The employer and employee agreeing on a settlement amount.
  2. The employee can settle with the third-party, so the workers’ compensation carrier receives the full lien amount.
  3. The employee can file a petition for the lien to be reduced or extinguished.

In the event that a judgment is obtained by the employee against a third-party, or in the event that a settlement has been agreed upon by the employee and the third party, either party may apply to the resident superior court judge of the county, or to a presiding judge of the district to determine the subrogation amount. This is known as a 10.2(j) hearing. The threat of a 10.2(j) hearing often results in workers’ compensation carriers accepting far less than their actual full lien from the settlement recovery.

If you have a third-party negligence claim and a corresponding North Carolina workers’ compensation claim, it is important that you under 10.2(j) and how it impacts how much the workers’ compensation carrier is entitled to recover.

While the attorneys of Maginnis Law do not handle workers’ compensation claims we handle many third-party cases per year. Our attorneys will work with your workers’ compensation attorneys to maximize your recovery. To speak with one of our third-party negligence lawyers, call Maginnis Law at 919.526.0450 or submit a request through our contact page.