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§ 11-9-410. Third-party liability

Home » US Law » 2020 Arkansas Code » Title 11 - Labor and Industrial Relations » Chapter 9 - Workers' Compensation » Subchapter 4 - Employer Liability — Insurance » § 11-9-410. Third-party liability

§ 11-9-410. Third-party liability

§ 11-9-410. Third-party liability

  1. (a) Liability Unaffected.

    1. (1)

      1. (A) The making of a claim for compensation against any employer or carrier for the injury or death of an employee shall not affect the right of the employee, or his or her dependents, to make a claim or maintain an action in court against any third party for the injury, but the employer or the employer’s carrier shall be entitled to reasonable notice and opportunity to join in the action.

      2. (B) If they, or either of them, join in the action, they shall be entitled to a first lien upon two-thirds (2/3) of the net proceeds recovered in the action that remain after the payment of the reasonable costs of collection, for the payment to them of the amount paid and to be paid by them as compensation to the injured employee or his or her dependents.

    2. (2) The commencement of an action by an employee or his or her dependents against a third party for damages by reason of an injury to which this chapter is applicable, or the adjustment of any claim, shall not affect the rights of the injured employee or his or her dependents to recover compensation, but any amount recovered by the injured employee or his or her dependents from a third party shall be applied as follows:

      1. (A) Reasonable costs of collection shall be deducted;

      2. (B) Then, in every case, one-third (1/3) of the remainder shall belong to the injured employee or his or her dependents, as the case may be;

      3. (C) The remainder, or so much as is necessary to discharge the actual amount of the liability of the employer and the carrier; and

      4. (D) Any excess shall belong to the injured employee or his or her dependents.

  2. (b) Subrogation.

    1. (1) An employer or carrier liable for compensation under this chapter for the injury or death of an employee shall have the right to maintain an action in tort against any third party responsible for the injury or death. However, the employer or the carrier must notify the claimant in writing that the claimant has the right to hire a private attorney to pursue any benefits to which the claimant is entitled in addition to the subrogation interest against any third party responsible for the injury or death.

    2. (2) After reasonable notice and opportunity to be represented in the action has been given to the compensation beneficiary, the liability of the third party to the compensation beneficiary shall be determined in the action, as well as the third party’s liability to the employer and carrier.

    3. (3)

      1. (A) After recovery shall be had against the third party, by suit or otherwise, the compensation beneficiary shall be entitled to any amount recovered over and above the amount that the employer and carrier have paid or are liable for in compensation, after deducting reasonable costs of collection.

      2. (B) In no event shall the compensation beneficiary be entitled to less than one-third (1/3) of the amount recovered from the third party, after deducting the reasonable cost of collection.

    4. (4) An employer or carrier who is liable for compensation under this chapter on account of injury or death of an employee shall be entitled to maintain a third party action against the employer’s uninsured motorist coverage or underinsured motorist coverage.

    5. (5) The purpose and intent of this subsection is to prevent double payment to the employee.

  3. (c) Settlement of Claims.

    1. (1) Settlement of claims under subsections (a) and (b) of this section must have the approval of the court or of the Workers’ Compensation Commission, except that the distribution of that portion of the settlement that represents the compensation payable under this chapter must have the approval of the commission.

    2. (2) Where liability is admitted to the injured employee or his or her dependents by the employer or carrier, the cost of collection may be deducted from that portion of the settlement under subsections (a) or (b) of this section representing compensation, upon direction and approval of the commission.

    3. (3) No party shall settle a claim under subsections (a) and (b) of this section without first giving three (3) days’ written notice to all parties with an interest in the claim of the intent to settle.

    4. (4) Each party with an interest in a claim under subsections (a) and (b) shall cooperate with all other parties in litigation or settlement of such claims.