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Third Party Claims: When Worker's Compensation Just Doesn't Compensate

As most working individuals know, because of the laws in California when someone is hurt on the job their only recourse is typically through the Worker's Compensation system. There are benefits to this system, particularly the fact that it is 'no-fault' and even if the injury was due to the worker's own negligence they can still recover. However the "compensation" is limited in scope and many workers are left without an inadequate recovery for even serious injuries. If the injury was caused or contributed to by a third party who is not employed by the employer sometimes the injured party's recovery is not limited to workers compensation and the non-employee can be can be held responsible as well. This is called a 'third party claim.' The legislature and courts are continuing to make it more and more difficult to recover against third parties who cause or contribute to an accident, though, so it is important to consult with an attorney well-versed in the area.

Under the Labor Code, pursuant to section 3706, the only time when an employer can be sued directly is if they fail to carry worker's compensation insurance. In such a case, the employer is presumed to be negligent and the burden of proof is on the employer to demonstrate that they were not negligent under Labor Code section 3708. This reverses the standard burden of proof which is on the plaintiff and is a powerful tool. However, since most employers do carry worker's compensation insurance, if a person is injured on the job they are likely going to be covered by the statutory system.

As an attorney, though, it is important to look and see if there was some other cause that contributed to the accident, because worker's compensation is often inadequate to handle the kinds of losses sustained in a major incident. One common situation where this is likely to occur is in construction accidents. Under those conditions there is often a general contractor who is in charge of overseeing the projects with subcontractors and even sub-subcontractors beneath them.

Prior to 1993, and a court decision entitled, Privette v. Superior Court 5 Cal.4th 689, the avenues available for recovery were much broader. If employee of a subcontractor was injured on the job, that person had a wide option of who they could sue, including the general contractor or the owner of the property. The ramifications of Privette, and a long line of cases that followed, is that under the law now it is presumed that when an owner hires an independent contractor any duty for safety is delegated. One of the more recent cases, SeaBright Ins. Co. v. US Airways, Inc. 52 Cal.4th 590, even held that OSHA violations were presumptively delegated.

What is left in the wake off these decisions is a strict framework where the only way the hirer of an independent contractor can be held liable for a workplace injury is if that hirer retained control over the contractor's work and exercised it in a way that "affirmatively contributes" to the employee's workplace injury. For example, if a general contractor promises to undertake a safety task, such as securing a roof and the failure to do so winds up in an injury, that general contractor can be sued. Likewise, if an owner supplies a defective forklift and someone gets hurt, that owner can be held liable. Sometimes the contracts between owners, general contractors, and subcontractors can delineate the safety duties among the parties so it is important to always read these thoroughly.

With many legal hurdles now in place, it takes creative thinking to demonstrate ways of showing retaining control that affirmatively contributes to injury. However, if you find worker's compensation is inadequate for your injuries, it is important to explore every avenue for recovery. Fighting the same obstacles, Ball and Bonholtzer recovered 4.9 million from a general contractor and subcontractor who failed to cover an atrium that a worker fell through, after the worker's compensation award just failed to compensate.

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