Filing a Third Party Lawsuit After a Workers Comp Injury Claim

What is an L&I Third Party Claim?

A third party claim is an L&I claim together with a Personal Injury claim arising out of the same facts. When you have both a personal injury claim and an L&I claim, the personal injury claim is called a third party claim.

  • An L&I Claim in Washington State is filed after a job injury or occupational disease to a worker.
  • A Third Party Claim in Washington State L&I is an on the job injury caused by someone other than your employer or co-worker
  • Third Party Claim Example in WA L&I:
    • For example: a delivery driver is rear ended on the highway. He or she has two claims. He has an L&I claim because he is injured while on the job. He also has a third party claim because that same set of facts also resulted in an injury caused by someone who is not his employer or a co-employee.

The Good and Bad of Third Party Workers Compensation Claims and Lawsuits.

A Third Party Claim with an L&I Claim can be a good thing.

  • There are two claims, both L&I and third party. Two is better than one, right? What could go wrong? Some third party claims can be worth a lot of money.
  • Your claim is only as good as your facts and the work you and people helping you put into it.

Third Party Workers Comp Claims are not all good.

The downside of a third party claim is that L&I or the self insured employer has a lien on your third party recovery. This is also known as a workers comp lien on a personal injury settlement. That means because L&I or the Self Insurer has paid money on your L&I claim they will get some of that money back from you when you settle your third party claim. The exact amount they get from you is subject to the worksheet formula, and possible compromise.  Sometimes the amount L&I or the self insured employer take is shockingly large. Sometimes the third party settlement will ruin the remaining L&I claim because it creates an offset and takes away L&I benefits.   Understand how the offset formula applies to your L&I claim BEFORE you settle your third party claim.

Be sure your Third Party attorney understands L&I liens and offsets.

Some personal injury attorneys are clueless about this interrelationship between L&I claims and Third Party claims. This could cost you a lot of money. These lawyers typically are personal injury lawyers who “aren’t handling your L&I claim.” While that is an OK relationship on its face, it is very bad if that attorney does not know that when the PI claim settles first, the PI claim can ruin the L&I claim. Insist your third party personal injury attorney explains to you in writing how the offset works and how much it will be, and how it affects your ongoing L&I claim benefits. Be sure your attorneys work to reduce the offset as part of the third party settlement. If they cannot reduce the offset or if they take no interest in what you’re saying, you have the wrong attorney. They could unintentionally or otherwise ruin your L&I claim. Don’t let your third party attorney do that. Be careful. Read this section again if you have any questions or concerns.

Third Party Election Form – L&I.

The third party election form is a formal notice given by you to L&I on the subject of whether or not you believe you have a third party claim. Even though L&I is asking, as a practical matter you don’t have any choice whether you have a third party claim. The facts decide that. The third party election form also serves to designate who will be in charge of  the third party claim, you or L&I.

Why Did L&I Send Me a Third-Party Election Form?

  • L&I sent this form because they suspect you have a third party claim.
  • You have a third party claim if you were injured by something or someone not your employer or co-worker. RCW 51.24.030
  • The statute, RCW 51.24.070 allows L&I or the Self Insurer to require the injured worker or beneficiary to make a choice about which lawyer will pursue the third-party claim. As a practical matter this means you are choosing a lawyer to represent you on the third party claim, or L&I will assign you one of their lawyers over whom you have no control.  This one’s a no brainer, choose your own lawyer, if you can get a good one to take your case.
  • L&I has spent money on your claim. A successful third party claim allows L&I to get some of that money back. If you get a lawyer involved, your lawyer should work to keep your L&I repayment reasonable. Said another way, do not give L&I too much of your third party money. Get a lawyer to help.

How Do I Complete this Third-Party Election Form?

  • Fill it out and send it in. Better yet, if you have a third party claim then you are going to have a lawyer. Find your own lawyer and have him do it for you. If you don’t choose your own lawyer, the state will choose your lawyer.

Option A puts you in charge of your third party workers comp claim and its future.

  • Option A is usually the smart choice

Option B you give up your right to take legal action. L&I takes over your third party claim.

  • If L&I chooses to pursue your third party claim, they will hire a personal injury attorney for you. Some of these lawyers know what they are doing and some are inexperienced. If you trust L&I to choose your attorney then you take your chances.
  • Your choice then is really which attorney will handle the third party claim. Your attorney or L&I’s attorney.  This is a no brainer, of course you will want your own attorney. You are going to pay one of these two lawyers out of the third party recovery, so make it the lawyer who represents you.
  • Only your lawyer will have your best interests in mind. The L&I lawyer will be working for L&I. That conflict of interest could cost you money.
  • Under either option, L&I will have to pay part of your attorney fees if you get them some of their money back when you win your third party claim.
  • Pick a good lawyer for yourself. Call on us and we will be glad to assist.

What if I Have a Third Party Claim but Don’t Want It?

You don’t have this choice. L&I has paid money on your claim and they want it back. L&I will pursue all good third party claims, like it or not. Your only choice is which lawyer will handle your third party claim, your lawyer or their lawyer.

Is there a Deadline to Return this Form? 

  • There is a 60 day time deadline.  However, L&I’s initial request often doesn’t start this 60 day time clock because their letter may not rise to the level of an RCW 51.24.070 demand.  Just the same, don’t sit on this. Said another way, you might have more time then L&I initially says you have, however since you need to make a decision, do it now. If you need help call us for a free strategy session.

WISHA and OSHA in Washington State Third Party Claims.

WISHA and OSHA regulations are in place to protect workers. Employers are required to furnish a work environment free from injury causing hazards. Violations of the regulations are evidence of negligence and can be very helpful in third party lawsuits. Washington Industrial Safety and Health Act (WISHA) regulations can be found at WISHA. Occupational Safety and Health Act (OSHA) can be found at OSHA.

How Does a Third Party Lawsuit Work with L&I?

  • Worker is injured on the job by someone or something not his/her employer or co-employee.
  • The worker and his doctor file an L&I claim within the Statute of Limitations
  • The worker and his lawyer file a third party claim within the Statute of Limitations
  • Win both and work out L&I’s subrogation.

Statute of Limitations (SOL) for L&I Claims and Third Party Lawsuits

  • L&I SOL – one year to file the L&I injury claim and longer for occupational disease. See Statute of Limitations (L&I) for details.
  • Third Party SOL – three years is the deadline for you to file a third party claim.  This is an important deadline. Get the lawsuit filed on time. However, there is no SOL which runs against the State of Washington. That means they can bring a third party claim at any time. They may be able to help if you miss your statute of limitations.

What if I’m Not at Fault for my Injury?

  • L&I claim? Not being at fault means nothing. All L&I claims are no fault claims, so your fault or lack thereof means nothing to the L&I claim. The fault of the person who hurt you also means nothing to the L&I claim.
  • Third party claim? Third party claims are negligence based, so fault is very important. Not being at fault is a good thing. Having the person who hurt you being at fault is both a good thing and a requirement. To win a third party claim you must prove that the third party’s negligence (fault) contributed in some way to your injuries.

Third Party Workers Comp Claim Examples.

If you are on the job and any of these happen to you then you may have a third party workers compensation claim.

  • Vehicle accident caused by another driver or road hazard
  • Defective equipment or product
  • Accident offsite of employers usual place of business
  • Construction Site Injury to include
    • Injury to an employee of a subcontractor caused by the general or another subcontractor, or injury to an employee of a general contractor caused by a subcontractor
    • Unlicensed contractor who hires a worker
    • Unsafe worksite
    • Unsafe building or stairs
    • Exposure to toxic things
  • Temporary Agency Employee

Can I Sue a Third Party if I Have an L&I Claim?

Yes, that’s what we’re talking about. You can sue a third party even if you have an L&I claim. Your claim against them is a third party lawsuit. The third party is a person who is not your co-employee and not your employer.

Can I Sue My Employer or Co-worker for an On The Job Injury?

No. The general rule is you cannot sue your employer or coworker for a job injury because they are not a third party.  Instead you can file an L&I claim.

There are three of exceptions to this rule:

  • Temporary Employee. Temporary employees can sue their job site employer but not their temporary agency employer. See Temporary Agency Employee Lawsuits
  • Intentional Injury. You can  sue your employer or a co-employee if the injury was intentional. The statute of limitations for an intentional injury is 2 years. With an intentional injury on the job you also have an L&I claim, with its own statute of limitations.  For more information see can I sue my employer?
  • Non injury lawsuits. You can sue your employer for employment law concerns such as discrimination, overtime and pay issues, etc. See:  Workers Compensation is not Employment Law

How to File a Third Party Claim.

Here is the information required to file a third party claim:

There are two things, both must be done to effectively handle a third party claim .

  • File a lawsuit on time.
    • Filing a lawsuit tolls the statute of limitations and commences the lawsuit. You will probably want a lawyer. Get a good one and be sure her or she understands L&I claims and the third party offset.
  • Third Party election form completed and returned before the deadline
    • Complete and file a third party election form with the Department of Labor and Industries. See Third Party Election Form for details and a link to the form.

What is My Third Party Claim Worth?

L&I Third Party Recovery Worksheet

To figure out the value of a third party claim use the interactive online worksheet formula. To figure the value you must know the following:   

• Gross Recovery
• Benefits Paid
• Attorney Fees
• Costs

Fill in the numbers and the interactive worksheet formula will work itself out. If your numbers aren’t set yet you can only make estimates. You can also call or e-mail us and we’ll help with the calculation for you, based on the above figures you supply to us.

Early on in your case you won’t know these numbers, so case value will be a guess.

Do I want a Lawyer for a Third Party Lawsuit? Can I DIY?

  • If L&I believes you have a third-party case, you are going to have a lawyer. You have no choice about that. Your choice is who picks your lawyer, you or L&I.
  • There may be a lot of money involved here. It makes a difference who your lawyer is. Don’t let L&I’s lawyer represent you – they have a conflict of interest.
  • If you miss the election deadline, contact an L&I lawyer. There may still be time to get this done.
  • If you ended up with an L&I assigned lawyer and now want your own lawyer, you may be able to change lawyers. See RCW 51.24.070, right of reelection.
  • Third party corporations are usually represented by a virtual army of corporate and insurance lawyers. If you hope to do well then consult with your own third party lawyer. The consultation is free, and then you can make your best decision about DIY or hire a lawyer. The lawyer will look at your case from every angle and give you his expert opinion about your best course of action.

Still got questions? We have answers. We know L&I and Third Party Law. See: L&I Attorney – Washington Workers Compensation

Want to Talk with a Third Party Attorney?

We know Third Party Law.  Lets talk about your concerns.
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Chris Sharpe

Meet Chris Sharpe

Christopher Sharpe is the go to attorney for injured persons. His law firm is helpful, honest, and knowledgeable about workers' compensation and personal injury law in the State of Washington. Chris has been helping injured Washington State workers for over 40 years. He has built a successful law practice by thoroughly educating, honestly helping, and successfully representing workers throughout Washington State.

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