What Happens If I Receive Money in a Third Party Action?


If you have been hurt on the job, one of your first (and often your only) avenues of recourse is to file an application for Workers’ Compensation benefits. If your injuries were caused in part by the negligence or carelessness of a third party—the driver of an automobile or the manufacturer of a defective product, for example—you may also be able to file what’s known as a "third party action," where you can file a lawsuit outside the workers’ compensation system for those damages. What happens if you recover money in that lawsuit? Will it have an effect on the amount of benefits you receive through workers’ compensation?

The workers’ compensation in New Jersey allow employers and workers’ compensation insurance companies to take a credit for any amounts received by an injured worker from an unrelated third party, but only to the extent that doing so would prevent a duplicate recovery of benefits. For example, if you were reimbursed by your health insurance provider for some or all medical costs, you cannot receive any Workers’ Compensation benefits designed to cover those medical costs. If however, a verdict or damage award is only intended to compensate you for the third party’s pro rata share of responsibility, you won’t have to forfeit any benefits.

As a general rule, if your settlement is equal to or greater than the workers’ compensation award, the Workers’ Compensation insurer will be entitled to a credit of 2/3rds of the amount payable by or on behalf of the employer, less $750. If, on the other hand, the settlement is less that the total workers’ compensation award, the credit will be 2/3rds of the settlement amount, less $750.

Contact Taylor & Boguski

At Taylor & Boguski, we have more than 70 years of combined experience representing injured workers across New Jersey. For a free initial consultation, send us an e-mail or call us at 856-200-8989.

We handle all Workers’ Compensation claims on a contingency basis. You won’t pay any legal fees unless we get compensation for your losses.

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