In Oregon, if the employer pays for workers' compensation insurance, then the worker may not sue the employer when he or she is hurt on the job. This "exclusive remedy" provision does not apply if either (a) the employer does not have workers' compensation coverage or (b) someone else -- or something else -- was at fault.
For example, we sued a printing press manufacturer for making a dangerous machine when a worker suffered a severe arm injury. The manufacturer was not the employer, so it was not immune from suit under Oregon law. A more typical example is someone hurt in a car or truck accident while on the job. The worker can sue the other driver that caused the wreck.
But there are special issues to be aware of involving who may sue and who gets the money.
If the workers' compensation insurer pays benefits, then it has a right to get paid back out of any lawsuit proceeds. In fact, the insurance company can force you to decide whether to file a lawsuit. If you do not sue, then the insurance company can sue in your name.
There's a big difference to Oregon workers depending on whether the worker sues or the insurance company files the lawsuit.
If the insurance company sues in your name, then it controls the litigation. It decides when to settle. If the insurance company sues and settles the case, then it gets paid before the worker. The formula is that the insurer gets paid in full before the worker gets even one penny.
If the injured worker sues, then the formula for distributing the money is very different. First, the costs of the lawsuit are paid, including the attorney fees. Next, the worker receives 1/3 of the balance. Only then does the insurance company get paid back. So, if the worker sues, he or she jumps ahead of the insurance company. If there is still money left after paying back the insurer, the balance goes to the worker. The key Oregon law is ORS 656.576 to 656.596.
Another consideration is this. If the insurance company sues, will it really care whether the worker receives any money? Will it settle too cheaply, making sure it gets repaid and not worry about winning monetary compensation for your disability?
So the lesson? If you are seriously injured at work because of someone other than a coworker or something like a dangerous machine, then it is in your interest to sue and not let the insurance company file a lawsuit in your name.
Jeff Merrick, Oregon Trial Attorney
503-665-4234
The above is not legal advice. I cannot give you reliable advice without knowing more information. It is intended to raise some issues for you to discuss with your own lawyer.
