Third Party Actions Policy 46-220 | Effective Date: March 30, 2016

Purpose

The purpose of this policy is to describe third party actions, and to outline an injured worker’s option to either:

  • Claim compensation from WorkSafeNB; or
  • Sue a third party

Scope

This policy applies to all injured workers who may be eligible to sue a third party as the result of a workplace accident.

Statements

1.0 General

There are two situations when the worker or dependent may sue another person for damages because of the accident. These are when:

  • An accident involves a motor vehicle; or
  • A worker, covered under the WC Act, has a workplace accident involving a third party.

2.0 Motor Vehicle Accidents              

Under the WC Act, workers can sue an employer (except their own) or a worker (except a worker employed by the injured worker’s employer) when injured in a workplace accident:

  • Involving a motor vehicle; or
  • Involving the transportation of a worker by a mode of transportation requiring liability insurance (for example, bus, taxi, or airplane).

Both cases relate specifically to circumstances involving negligence in the operation of the mode of transportation. In these situations, the intent of a lawsuit is to access the insurance policy held on the mode of transportation.

3.0 Third Party Actions

In addition to situations involving a motor vehicle, when there is evidence that a third party may have been involved in a workplace accident, WorkSafeNB sends a form of election to the injured worker or dependent, who then must complete the form and return it to WorkSafeNB choosing to either:

  • Sue the third party; or,
  • Claim compensation from WorkSafeNB.

3.1 The Injured Worker or Dependent Sues the Third Party

When an injured worker or dependent chooses to sue the third party, entitlement to compensation benefits in the future, for that accident, are normally given up, unless the injured worker receives less than the entitlement under the WC Act.

If WorkSafeNB approves the lawsuit in writing before a settlement is accepted or judgement is made, and the settlement or judgement is less than what the injured worker or dependent would have received from WorkSafeNB, WorkSafeNB pays the difference between the amount paid and what they would have been entitled to under the WC Act.

3.2 The Injured Worker or Dependent Claims Compensation

When a third party is involved in an accident, and the injured worker or dependent claims compensation, WorkSafeNB is subrogated the right to those damages which the injured worker could have claimed against the third party. 

 In this case, WorkSafeNB adjudicates the claim, and if accepted, starts paying benefits to the injured worker or dependent. The claim file is then sent to WorkSafeNB’s General Counsel who decides whether or not to sue the third party in order to recover the damages entitled to be claimed in a third party action, including costs of the claim paid by WorkSafeNB.

WorkSafeNB Sues

If WorkSafeNB sues the third party, upon settlement or judgement, WorkSafeNB:

  • Retains a portion of the money to cover the costs of the claim, legal costs, and administration charges;
  • Provides the injured worker with the excess amount, and
  • Provides the employer with cost relief. For more information, see Policy 21-300 Allocation of Claim Costs.

The President/C.E.O. may delegate authority to WorkSafeNB’s General Counsel to negotiate settlements while pursuing third party action.

Throughout this process, WorkSafeNB continues to pay compensation benefits to the injured worker and manages the claim using the same guidelines as for all claims for compensation.

3.3 Special Circumstances

When the injured worker has claimed compensation, WorkSafeNB may decide not to sue the third party to recover the costs of the claim, if legal advice determines that the cost benefit is not in WorkSafeNB’s favour.

When this occurs, the right to sue is returned to the injured worker or dependent on the following conditions:

  • WorkSafeNB’s interests in the cost of benefits paid are protected by including those costs in the third party action;
  • WorkSafeNB is reimbursed the claim costs paid, or to be paid, on behalf of the injured worker;
  • Full information on the amount of the settlement is disclosed to WorkSafeNB;
  • WorkSafeNB has no responsibility to pay any court costs or legal fees incurred in bringing the third party action; and

Having accepted these conditions, the injured worker may then proceed with a lawsuit while receiving benefits.               

The President/CEO may delegate authority to WorkSafeNB’s General Counsel to negotiate cost recovery amounts when an injured worker pursues legal action.

If the injured worker or dependent proceeds with the suit, upon settlement or judgement, the injured worker or dependent must provide WorkSafeNB with:

  • Full information on the amount of the settlement or judgement; and
  • Reimbursement of the claim costs paid, or to be paid, by WorkSafeNB less the collection fee.

Once WorkSafeNB receives reimbursement of the claim costs, WorkSafeNB ensures that the accident employer is relieved of the claim costs up to the amount reimbursed to WorkSafeNB, and continues to pay benefits to the injured worker.

4.0 Federal Government Employees

Human Resources and Development Canada manages federal government third party actions. For more information see Policy 21-011 Federal Government Employees.

Administration costs – the amount retained by WorkSafeNB on lawsuits it manages, which is 10% of claim costs, excluding legal fees.

Appeals Tribunal – means the Workers’ Compensation Appeals Tribunal established under the WHSCC & WCAT Act.

Judgement – the decision by a court regarding damages to be paid.

Notice of election – a notification to WorkSafeNB of the worker or dependent’s election to either claim compensation or pursue other options when an accident involves a third party (not covered by the WC Act) or another jurisdiction. Depending on the situation, the other options may include bringing action against the third party or claiming compensation, or other remedy, in the other jurisdiction.

Settlement – the agreement between parties regarding damages to be paid.

Subrogation – the legislated provision that permits WorkSafeNB, after determining an injured worker is entitled to payment of compensation benefits, to seek all those damages attributable to the accident from the third party.

Third party – when a worker is injured in a workplace accident as the result of negligence of another person not covered by the Workers’ Compensation Act (WC Act).

Third party action – a civil court action brought by either WorkSafeNB or the injured worker.

WorkSafeNB – means the Workplace Health, Safety and Compensation Commission or "the Commission" as defined by the WHSCC & WCAT Act.

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