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.

Amputation Claims, Settlements and Awards

A woman crossing the street in Paterson New Jersey was struck by a bus. Her injuries required amputation of her left leg above the knee, and amputation of part of her right foot. New Jersey.com news reported that more than two years after she filed a claim, she reached a $7.7 million settlement with the transit agency.

A 24-year-old man entered the emergency room after the tip of his finger was severed in an accident. In a paper presented as part of the New Jersey Medical School Interesting Case Series, authors Hahn and Travato suggest that treatment options might vary depend on, among other things, the patient’s age.

The U.S. Consumer Product Safety Commission toddler chair was recalled after two cases of finger amputation or severe finger injury.

What is the value of an amputated leg, finger, or arm?

A person who loses a limb as the result of the negligence or intentional act of another is legally entitled to compensation. What wisdom do the courts and insurers employ to determine the value of a toddler’s finger or an athlete’s leg?

The first and foremost concern of an insurance company is keeping the award low. Typically, the insurer will offer a quick, simple settlement for an amputation injury. A victim is advised to consult with a personal injury attorney before speaking with insurance company representatives about the accident or any settlement. There will be no legal fees for a consultation. The lawyer, experienced in dealing with insurers, will handle the claim while the amputee deals with pain, recovery, and grief over the loss. An appropriate personal injury law firm will have a proven record of successful representation, and have the resources to arrange for investigations, medical and rehabilitation evaluations.

A broad range of factors may affect the outcome of an amputation claim. The judge, jury, or insurance adjuster awarding damages or negotiating the settlement will consider circumstances surrounding the accident, age of the victim, any permanent loss of function, cosmetic effects of the amputation, cost of future treatment, disability accommodations, and any other issues brought to light at trial or in negotiations. The quality of legal representation is critical—insurance companies have entire legal departments employed to contest claims.

A personal injury attorney will file claims for damages against all negligent parties. Causes of accidental amputation and related liability claims may include dangerous conditions on property (premises liability), defective toys, tools, auto parts and other manufactured products (product liability), doctors’ errors and hospital negligence (medical malpractice), construction accidents, and all types of motor vehicle accidents.

If the amputation was due to a work-related injury, the state of New Jersey Workers’ Compensation Law provides a schedule that outlines in specific detail compensation for loss of an eye, loss of the thumb to the first joint, loss of a tooth, amputation of a leg at the knee, and other amputations. Compensation is defined in terms of weeks of work.

Contact us for a free attorney consultation, or visit our Practice Areas page for more information about Taylor & Boguski.