SLS 12RS-816 ORIGINAL
Page 1 of 5
Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
Regular Session, 2012
SENATE BILL NO. 478
BY SENATOR MURRAY
WORKERS' COMPENSATION. Provides for third party claims in workers' compensation
cases. (8/1/12)
AN ACT1
To amend and reenact R.S. 23:1101(B), 1102(B) and (C)(1), and 1103(B), relative to2
workers' compensation; to provide for third party claims brought by an employee or3
employer; to provide for satisfaction of claims; to provide for penalties for4
employers under certain conditions; and to provide for related matters.5
Be it enacted by the Legislature of Louisiana:6
Section 1. R.S. 23:1101(B), 1102(B) and (C)(1), and 1103(B) are hereby amended7
and reenacted to read as follows: 8
§1101. Employe e and employer suits against third persons; effect on right to9
compensation10
* * *11
B. Any person having paid or having become obligated to pay compensation12
under the provisions of this Chapter may bring suit in district court against such third13
person to recover any amount which he has paid or becomes obligated to pay as14
compensation to such employee or his dependents. The recovery allowed herein shall15
be identical in percentage to the recovery of the employee or his dependents against16
the third person, and where the recovery of the employee is decreased as a result of17 SB NO. 478
SLS 12RS-816 ORIGINAL
Page 2 of 5
Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
comparative negligence, the recovery of the person who has paid compensation or1
has become obligated to pay compensation shall be reduced by the same percentage.2
Regardless of the amount of the recovery by the employee or his dependents3
from a suit against a third person, the amount of recovery or credit by the4
person having paid compensation benefits or obligated to pay compensation5
benefits, shall be limited to the amount paid or obligated to be paid. The amount6
of any credit due the employer may be set in the judgment of the district court if7
agreed to by the parties; otherwise, it will be determined pursuant to the provisions8
of R.S. 23:1102(A).9
* * *10
§1102. Employee or employer suits against third persons causing injury; notice of11
filing12
* * *13
B. If a compromise with such third person is made by the employee or his14
dependents, the employer or insurer shall be liable to the employee or his dependents15
for any benefits under this Chapter which are in excess of the full amount paid by16
such third person, only after the employer or the insurer receives a dollar for dollar17
credit against the full amount paid in compromise for the recovery of lost wages18
and medical benefits, less attorney fees and costs paid by the employee in19
prosecution of the third party claim and only if written approval of such compromise20
is obtained from the employer or insurer by the employee or his dependent, at the21
time of or prior to such compromise. Written approval of the compromise must be22
obtained from the employer if the employer is self-insured, either in whole or in part.23
If the employee or his dependent fails to notify the employer or insurer of the suit24
against the third person or fails to obtain written approval of the compromise from25
the employer and insurer at the time of or prior to such compromise, the employee26
or his dependent shall forfeit the right to future compensation, including medical27
expenses. Notwithstanding the failure of the employer to approve such compromise,28
the employee's or dependent's right to future compensation in excess of the amount29 SB NO. 478
SLS 12RS-816 ORIGINAL
Page 3 of 5
Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
recovered from the compromise shall be reserved upon payment to the employer or1
insurer of the total amount of compensation benefits, and medical benefits,2
previously paid to or on behalf of the employee, exclusive of attorney fees arising3
out of the compromise; except in no event shall the amount paid to the employer or4
insurer exceed fifty percent of the total amount recovered from the compromise.5
Such reservation shall only apply after the employer or insurer receives a dollar for6
dollar credit against the full amount paid in compromise for the recovery of lost7
wages and medical benefits, less attorney fees and costs paid by the employee in8
prosecution of the third party claim.9
C.(1)(a) When a suit has been filed against a third party defendant in which10
the employer or his insurer has intervened, if the third party defendant or his insurer11
fails to obtain written approval of the compromise from the employer or his insurer12
at the time of or prior to such compromise and the employee fails to pay to the13
employer or his insurer the total amount of compensation benefits and medical14
benefits out of the funds received as a result of the compromise, the third party15
defendant or his insurer shall be required to reimburse the employer or his insurer16
to the extent of the total amount of compensation benefits and medical benefits17
previously paid to or on behalf of the employee to the extent said amounts have not18
been previously paid to the employer or his insurer by the employee pursuant to the19
provisions of Subsection B of this Section. Notwithstanding such payment, all rights20
of the employer or his insurer to assert the defense provided herein against the21
employee's claim for future compensation or medical benefits shall be reserved. For22
the purposes of this Paragraph, "funds" means lost wages and medical benefits,23
not an award for pain and suffering or general damages.24
(b) In any third party compromise or settlement, reasonable amounts of25
any recovery shall provide for reasonable considerations distinguishing between26
special and general damages, and such amounts shall be expressly provided as27
agreed upon between the parties and the employer or compensation issuer.28
(c) If the employer or his insurer arbitrarily or unreasonably withholds29 SB NO. 478
SLS 12RS-816 ORIGINAL
Page 4 of 5
Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
its consent of the compromise between the third party and the employee, said1
employer or its insurer shall be liable for attorney fees and penalties. Such2
penalties should be fixed at the amount of twelve percent of the compensation3
lien or up to eight thousand dollars, whichever is greater.4
* * *5
§1103. Damages; apportionment of between employer and employee in suits6
against third persons; compromise of claims; credit7
* * *8
B. The claim of the employer shall be satisfied in the manner described9
above from the first dollar of the judgment without regard to how the damages have10
been itemized or classified by the judge or jury. Such first dollar satisfaction shall11
be paid from the entire judgment, regardless of whether the judgment includes12
compensation for losses other than medical expenses and lost wages. but shall only13
include an award for damages of lost wages and medical expenses.14
* * *15
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Carla S. Roberts.
DIGEST
Present law allows any person who has paid or is obligated to pay compensation to sue a
third party to recover any amount he has paid or is obligated to pay as compensation to an
employee or his dependents. Any such recovery shall be in the same percentage to the
recovery of the employee or his dependents against the third party. If the recovery of the
employee has been decreased by comparative negligence then the recovery of the person
who has paid or is obligated to pay compensation shall be reduced by the same percentage.
Any credit due the employer may be set in the judgment of the district court if agreed by the
parties otherwise it will be determined by statute.
Proposed law clarifies present law by restricting the reimbursement of compensation benefits
paid or credits against obligations to pay by intervention in third person suits to amounts
actually paid or obligated to pay under the Workers' Compensation Act.
Present law provides for notice of filing suit by an employee or employer. Present law
provides that disputes between an employee and employer over calculation of latter's credits
shall be resolved by a workers' compensation judge and that any decision rendered shall not
affect either party's rights.
Present law provides for employer or insurer credits in third party compromises and further
provides for written approval as well as notice of all compromises. Present law provides that
failure of an employee to report written compromise results in forfeiture of future
compensation and medical expenses. SB NO. 478
SLS 12RS-816 ORIGINAL
Page 5 of 5
Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
Proposed law clarifies that employer or insurer recovery or credits in third party
compromises are limited to payments made or amounts recovered for compensation and
medical benefits only. Proposed law also provides for express distinction between special
and general damages in any compromise or settlement of third party claims. Further sets
penalties for an employer or insurer who arbitrarily or unreasonably withholds consent in
the third party compromises at 12% of the compensation lien or $8,000, whichever is
greater.
Present law states that an employer's claim shall be satisfied from the first dollar of the
judgment without regard to how the damages have been itemized or classified by the trier
of fact. The satisfaction of the claim shall be made from the entire judgment regardless of
whether the judgment includes compensation for losses other than medical expenses and lost
wages.
Proposed law changes present law by requiring that the employer's claim be satisfied from
the first dollar of the judgment but shall only include an award for damages of lost wages
and medical expenses.
(Amends R.S. 23:1101(B), 1102(B) and (C)(1), and 1103(B))