Information
The Rights of Injured Construction Workers under California Law
John D. Winer, San Francisco
A. The Serious Nature of Construction Accident Injuries.
Unfortunately, many serious injuries and deaths occur at
construction sites, usually to employees working at the site
but sometimes injuries also occur to non-construction workers
who are visiting or passing by.
There are many opportunities for people at a construction
site to be injured and California law has developed a series
of rules and regulations aimed at protecting construction
workers and other people at construction sites.
Sometimes these laws provide an adequate remedy for
injured workers and bystanders, but sometimes they do not. A
discussion will follow.
B. Who Can Sue for an Accident at a Construction Site.
Although there are limitations placed on the right of
construction workers to sue their own employer and other
potential wrongdoers that may cause a construction site
accident, basically, any person injured (or survivors of
someone killed) solely by the negligence of a person or entity
other than the employer may be able to bring a case.
A consultation with an attorney who is experienced in
construction accident law will be necessary to determine what
a plaintiff’s rights are in a given case.
Spouses of the injured plaintiffs can also bring their own
lawsuit for loss of consortium damages; that is, damages for
the loss of society, comfort and care of the injured
plaintiff. See the section on Damages in this article.
C. Owner’s and General Contractor’s Liability to
Construction Workers for Injury or Death.
i. What duty is owed by owners and general
contractors to construction workers.
a. Duty to construction workers generally.
An owner of property on which work is being done and a
general contractor supervising the work may be found liable to
workers at the site for failing to use ordinary care to:
► provide them with a reasonably safe work place.
► warn of dangers that are not obvious.
► keep the construction site in a reasonably safe
condition.
b. Worker’s compensation preclusions.
1. Employees of general contractor cannot
sue their employer.
However, worker’s compensation laws will prohibit an
employee of the general contractor from suing his or her
employer as long as the employer had worker’s compensation
insurance.
This is known as the worker’s compensation “Exclusive
Remedy” doctrine. With very few exceptions, an employee
cannot sue his or her employer for negligence. Their sole
remedy is the receipt of worker’s compensation benefits.
The good news about this doctrine is it is a “no fault”
system. Thus, if an employee can prove injury at work, her or
she will recover benefits without having to prove fault.
The bad new is that worker’s compensation benefits are
atrociously low and do not even begin to cover the damages
suffered by an injured worker. A high wage earner, like most
construction workers, will receive only a fraction of their
salary in worker’s compensation benefits. There is no
recovery for pain and suffering and emotional distress damages
under worker’s compensation law.
2. Employees of owner cannot sue the
owner.
In the construction accident context, an employee of the
owner of the construction site cannot sue the owner for the
same reasons that the employee of a general contractor cannot
sue the general contractor; that is, the worker’s compensation
exclusive remedy doctrine.
c. When negligence of the owner or contractor
is actionable.
However, employees of the general contractor can sue
property owners if they can establish actionable negligence on
the part of an owner and the employees of the owner can sue
general contractors if they can establish actionable
negligence on the part of the general contractor.
The term “actionable negligence” is chosen carefully in
the context of a construction accident because, as will be
discussed later in this article, there has been some
limitation in recent years placed on what is and what is not
considered actionable negligence in a construction accident
context. See “E” below.
d. Duty of due care of the owner and general
contractor extends to hazardous work
situations.
Worker’s compensation issues aside, the owner and a
general contractor owe a duty to use ordinary care to avoid
injuring workers even in hazardous work situations.
e. General contractor and owner do not usually
need to warn of obvious dangers.
The liability of a general contractor or owner cannot be
based solely on the failure to warn a worker of a dangerous
condition that was, or should have been obvious to the worker.
However, a general contractor or owner may be liable for
failing to correct a dangerous condition of which, in the
exercise of ordinary care, it knew or should have known even
if the danger was obvious to workers at the site -- if it was
foreseeable that the danger, despite its obviousness, could
cause injury, as when the necessity of the job requires
workers at the site to encounter the potential danger.
f. The owner or contractor may not have a duty
to warn of obvious danger, but may have
duty to correct it.
The owner or general contractor may not have a duty to
warn of an obvious danger but still may have the duty to
correct it under certain circumstances.
g. Owner’s or general contractor’s duty maybe
reduced if complete control is given over
to a subcontractor.
The amount of duty of ordinary care that an owner owes at
a job site may be reduced or eliminated if the owner gives
complete control and supervision over to a subcontractor.
However, liability for a dangerous condition may still be
imposed on an owner or general contractor who:
► created the condition personally or through an
employee.
► had notice of the condition or by reasonable
inspections should have discovered it, and had
sufficient control to take reasonable safety
measures
► Knew or should have known that a subcontractor’s
work had created a type of dangerous condition
that may reasonably be expected to occur again
unless appropriate precautions were taken.
ii. Violations of safety statutes and regulations.
a. Statutes and regulations may form the basis
of liability against owners and general
contractors.
A basis for liability against a construction site owner or
general contractor may be the failure to fill a specific duty
relating to the safety of workers imposed by statute, local
ordinance or regulation.
b. Non-delegable duty.
If a duty is imposed on a general contractor by statute,
it is often “non-delegable” -- this means that the general
contractor remains liable to the injured person even when the
contractor has “delegated” or given over responsibility for
the work, or particular aspects of workplace safety, to an
independent contractor.
Not infrequently on construction projects, a general
contractor will turn over almost complete control of an aspect
of a construction project to a subcontractor. However, the
law recognizes that in terms of the responsibility to follow
statutes and regulations, a contractor remains responsible for
job site safety.
c. CAL/OSHA regulations are now admissible
into evidence.
Fortunately for plaintiffs, they are now, because of new
legislation, allowed to introduce evidence of Labor Code
safety provisions and safety orders in personal injury and
wrongful death cases. This law has been changed to make
CAL/OSHA safety regulations admissible into evidence.
In the rare situation in which an employee can sue an
employer, such as when the employer does not purchase worker’s
compensation insurance or plaintiff is able to establish a
“dual employment” situation, the CAL/OSHA violations can be
entered into evidence at the time of trial.
Further, an expert witness has always been able to testify
on the “custom and practice” in the construction industry even
though that custom and practice was based on a Labor Code
safety violation.
d. Special duties imposed by contracts.
In addition to State and local statutes and regulations,
it is important for a plaintiff in a construction accident
case to obtain the actual contracts between the owner and the
general contractor and the general contractor and the
subcontractors.
These contracts may impose responsibility for the safety
of workers. For instance, an employee of a subcontractor may
be able to sue a general contractor on the basis of a contract
between the owner and general contractor that states that the
general contractor cannot delegate job safety responsibilities
to the subcontractors.
D. Responsibilities of the Owner and the General
Contractor to People at the Construction Site Who Are
Not Construction Workers.
An owner or general contractor owes a duty of ordinary
care to every person at a construction site, even uninvited
persons if their presence is foreseeable.
The key is whether the owner or general contractor
exercised “control” over the construction site. If they do,
then they owe a duty of ordinary care to everyone other than
their own employees. This would include passersby,
inspectors, doctors called to the scene, children playing at
the construction site if it is reasonably foreseeable that
they will be present, and any other person.
E. Liability of Owners for the Negligent Acts of General
Contractors and Liability of Owners and General
Contractors for the Negligent Acts of Subcontractors.
i. Determining liability amidst the various
contractors and owners at a construction site is
confusing and uncertain.
One of the most confusing and quickly changing areas of
personal injury law involves a determination of the
responsibility of who is responsible for construction site
accidents.
ii. Unlike employer/employee relationships, the
general rule is that someone who hires an
independent contractor is not responsible for
that contractor’s negligence.
The general rule is that someone who hires an independent
contractor to do a task is not liable for the independent
contractor’s negligence.
In other words, usually under the law an employer is
responsible to other people if the employer’s employee acts
negligently. This is based on the public policy reason that
the employer should bear the risk of their employees’
negligent acts that harm other people. This is known as
“vicarious liability,” i.e., liability imposed on the employer
even though the employer did nothing wrong.
iii. Vicarious liability law generally does
not apply to a defendant who hires an
independent contractor.
The law of “vicarious liability” frequently does not apply
when an employer such as a general contractor at a job site
hires subcontractors to perform work instead of using his own
employees. Thus, the general rule, to which there are many
exceptions, is that the owner or general contractor at a
construction site is not ordinarily liable for accidents:
► caused solely by the operation of a
subcontractor over whom the defendant had no
control or supervision.
► caused by conditions outside the scope of the
owner’s or general contractor’s own work or
beyond his or her control.
iv. Exceptions in which the hirer of
independent contractor can be found liable.
However, there are many exceptions to this rule that apply
to construction site accident. The hirer of an independent
contractor or subcontractor may be liable for the hirer’s own
negligence in:
► failing to inspect the work after completion.
► hiring an incompetent or careless contractor.
► giving orders or directions or otherwise
exercising any retained right of control.
v. Independent contractor must truly be
“independent.”
Further, sometimes the plaintiff can establish that the
negligent person was not actually an independent contractor
but an employee of the defendant based on the hirer’s right to
control the manner in which the negligent person works and
other factors.
vi. Unlicensed “independent contractor”
presumed to be an employee of the hirer.
A key rule in construction accident cases is that a person
who does not have a required contractor’s license or the
employee of such a person is conclusively presumed to be an
employee of the hirer.
Thus, an owner who hires an unlicensed general contractor
or a general contractor who hires an unlicensed subcontractor
will be held responsible for the unlicensed contractor and the
employees of the unlicensed contractor’s negligent acts, just
as if they were employees.
vii. “Peculiar risk” doctrine.
a. The former rule protected construction
workers.
One of the key exceptions to the rule that a contractor
was not normally responsible for the negligent act of
subcontractors used to be the “peculiar risk” doctrine. That
doctrine stated that a person who hired an independent
contractor to do work likely to create, during its progress, a
peculiar unreasonable risk of harm to others unless special
precautions were taken was liable for harm caused by:
► absence of those precautions, if the hirer
failed to provide for them in the contract or
otherwise.
► the contractor’s failure to exercise reasonable
care to take the precautions whether or not
provided for in the contract.
b. In recent years, the “peculiar risk”
doctrine has been severely limited.
Unfortunately for injured workers, the California Supreme
Court, in recent years, has severely limited this doctrine
which was sometimes one of the only ways that an injured
worker could get out of the worker’s compensation system and
sue a negligent owner or general contractor.
The California Supreme Court has held that in most cases,
the peculiar risk doctrine no longer provides a basis for
imposing liability on the hirer of an independent contractor
for injury to the independent contractor’s employee. The only
major exception to the California Supreme Court’s rulings may
be where the independent contractor retains control over the
operative details of the subcontractor’s work.
c. Why was the “peculiar risk” doctrine
so important?
The reason why the peculiar risk doctrine was so important
to workers was that frequently owners and general contractors
would allow dangerous practices of subcontractors to occur on
job sites. In a predictable fashion, one of the
subcontractors would be injured by the high risk, dangerous
practice of its employers. Because the exclusive remedy does
not allow the employee of the subcontractor to sue the
subcontractor, the only possible remedy left to the injured
worker to receive anything close to full compensation for his
or her injuries was to be able to sue the owner or general
contractor who had allowed the dangerous practice to take
place.
The Supreme Court now, in most circumstances, has
prevented workers in this situation from obtaining full
compensation for their injuries by all but eliminating the
“peculiar risk” doctrine.
d. “Peculiar risk” doctrine still
protects non-employees who are
injured.
However, the peculiar risk doctrine still imposes
“vicarious” liability on the hirer of an independent
contractor for injury to a non-employee, such as a child
injured by burning debris, a bystander or other visitor to a
job site.
In those cases, “peculiar risk” maintains its original
definition of a risk that is of the type ordinarily
encountered and the particular type of work being done, not
something strange or unusual.
F. Compensatory Damages in Construction Accident Cases.
In a construction accident case, plaintiff can recover for
past medical expenses, future predicted medical expenses, past
wage loss, future predicted wage loss and for past and future
pain and suffering.
The medical expenses are determined by the testimony of
physicians or other health care providers. Frequently, an
economist or an expert in the industry determines the amount
of future wage loss; however, no expert can testify to the
value of pain and suffering.
Pain and suffering is typically the most significant
element of a plaintiff’s damage and it includes emotional
distress. Contrary to popular belief, there is no formula for
pain and suffering awards and it varies greatly from case to
case depending upon the location of the case, the seriousness
of the injury and how well the case is presented.
G. Claim for Loss of Consortium.
A plaintiff’s spouse can also sue and recover damages for
‘loss of consortium.” A spouse is allowed to recover damages
for the loss of society, comfort and care that result from the
injured spouse’s unavailability due to their injury and having
to watch the plaintiff suffer. In order to recover these
damages, a spouse must be named as a party to the lawsuit and
must have been married to the plaintiff at the time of the
injury.
There are advantages and disadvantages to filing a loss of
consortium claim that should be discussed with an attorney
before filing.
H. Punitive Damages.
Under California law, if a plaintiff can prove that the
conduct of the wrongdoer was fraudulent, malicious or
despicable, he or she is entitled to recover punitive damages
which are intended to punish the wrongdoer and provide an
example for the rest of society. The focus of this type of
case is generally on the wrongdoing of the defendant as
opposed to the injury to the plaintiff. The amount of
punitive damage will vary depending upon the heinousness of
the defendant’s misconduct and its economic status. The law
recognizes that large companies have to pay more money in
punitive damages to be adequately punished than small
companies or individuals. In motor vehicle cases, punitive
damages are most frequently awarded against drunk drivers.
I. How Soon Must a Case Be Brought After a Construction
Accident?
Although there are a few exceptions, generally speaking in
California a case for serious personal injury must be brought
within one year of the date of the accident/incident. In rare
cases, that time period is extended to one year from the date
of the discovery of a wrongdoing and/or an injury. However,
be careful. If the case is against a public entity, the claim
must be brought within six months of the date of the accident.
Except in medical malpractice cases and cases against public
entities, minors have until their 19th birthday to bring a
case.
J. Considerations in Evaluating Cases for Settlement.
i. Many different factors are taken into
consideration when evaluating settlements.
There are many, many factors which are utilized when
evaluating a case for settlement. The perception that many of
the public have that a case settles for three times the
medical bills and wage loss cannot be further from accurate.
There are cases that settle for millions of dollars in which
there are no medical bills or wage loss and there are cases
that settle for a few thousand dollars in which there are
hundreds of thousands of dollars of medical bills and wage
loss. Following are some of the factors that are relevant to
evaluating the case for settlement purposes:
ii. Liability.
The clarity of liability (i.e., fault) in the case is a
critical settlement factor.
In a case in which liability is unclear or the plaintiff
has a substantial chance of losing, the settlement value of
the case has to be reduced significantly to factor in the
plaintiff’s chances of losing.
Theoretically, if the value of an injury claim is
$100,000, but plaintiff only has a 50/50 chance of winning, a
$50,000 settlement may be appropriate. However, plaintiffs
must always realize that cases against large defendants or in
cases in which the defendant is insured, that the plaintiff
has a lot more to lose than the defendant. In the example
above, if the insurance company turns down a $50,000 demand
and the plaintiff wins $100,000, payment of an additional
$50,000 will mean very, very little to a large insurance
company or corporation. On the other hand, if the plaintiff
turns down the insurance company’s $50,000 offer and wins
nothing at trial, it could create a devastating financial blow
in which the plaintiff is unable to pay for his or her bills.
iii. Comparative fault of the plaintiff.
If a plaintiff is found to be partially at fault for
causing his or her own injury, then their potential jury
award is reduced on the basis of their percentage of fault.
In other words, if a case were to go to trial, and plaintiff
were to receive a $100,000 verdict, but was found to be 25% at
fault, the plaintiff’s verdict would be reduced to $75,000.
Thus, when settling a case, plaintiff should reduce his or her
expectations of a settlement by the likely finding of
percentage of fault that would occur if a case were to be
tried.
iv. Likely jury verdict value of the case.
In cases in which insurance policy limits are not an
issue, most good attorneys attempt to settle the case based
upon what a jury would be likely to award if the case went to
trial.
Determining what a jury will award in a given case is more
of an art than science; however, reasonable estimates can be
made based upon what jurors have awarded in similar cases in
similar venues (i.e., locations). Most verdicts are reported
in “jury sheets” that lawyers read and utilize when attempting
to assess the value of any particular case.
v. Aggravated liability.
In cases in which a jury is likely to get angry at a
defendant for misconduct that was something more than
negligent, it is known that jurors are likely to “spike” their
verdict and award more money for a plaintiff’s injury than
they would if a defendant’s misconduct was merely negligent.
Aggravated liability situations, such as a drunken
defendant or a defendant who intentionally hurts a plaintiff
will increase the risk to the defendant of a large jury award
and this should be taken into consideration in settlement.
vi. Punitive damage exposure.
If the defendant’s misconduct is so bad that there is a
risk for punitive damages, i.e., the jury awarding damages
specifically to punish the defendant, this should become a
major factor in settlement negotiations. A potential award of
punitive damages is complicated by the fact that under the
law, the insurance company is not allowed to pay an award for
punitive damages; however, normally, the defendant, through a
personal attorney, attempts to apply pressure on the insurance
carrier to pay more in settlement so that the defendant will
not be exposed to the punitive damage risk.
vii. The character and credibility of the
parties.
A plaintiff’s case is worth more if he or she is likeable
and believable. It is known that jurors will award more money
to people that they like and believe than people whom they
dislike and don’t believe.
To a lesser extent, this is also true for defendants. A
likeable or believable defendant is likely to fare better in a
lawsuit than someone with the opposite traits.
viii. The extent of the injury.
Theoretically, the more serious an injury, the greater
should be the value of the plaintiff’s case.
ix. Objective evidence of injury.
Injuries that can be visualized or that are able to be
demonstrated by radiographic evidence such as x-rays, MRIs,
CAT scans or other scientific tests, will normally result in
higher settlements than injuries which depend upon the
believability of the plaintiff to prove.
There are many injuries which may have severe consequences
for the plaintiff which are not diagnosable by objective
tests. This can include severe back problems, headaches and
pain anywhere in the body. Experience has shown that jurors
are hesitant to award large damages in cases in which there is
no objective evidence of injury; thus, the settlement value of
any case is increased by objective evidence of injury and
decreased by the lack of it.
However, a credible plaintiff can sometimes overcome the
lack of objective evidence of an injury and this must also be
taken into consideration in the right case.
x. Past and future medical bills of the plaintiff.
As long as a plaintiff can establish that past medical
expenses and likely future medical expenses are reasonable and
related to their injuries, the bills will be an important
consideration in settlement.
However, the defense will generally claim some amount of
overtreatment and, thus, some portion of the medical bills
should be excluded from settlement consideration. Further,
the defense will argue that plaintiff will be unlikely to need
or have the claimed future treatment and/or the future
treatment would not be related to the subject incident.
xi. Past wage loss and future wage loss.
Wage loss is another important consideration in evaluating
a claim as long as plaintiff can establish that her or she was
reasonably off work or will be reasonably off work due to the
subject incident. The defense will likely take the position
that the amount of the wage loss should be discounted because
plaintiff should have been back to work sooner and, in the
case of future wage loss, the defense will claim that
plaintiff could be doing some type of work which would pay
them as much or almost as much as the work they were doing
before the incident.
Also, for plaintiffs who are self-employed or do not have
a strong consistent earning history before the
accident/incident, it can become very difficult to establish a
wage loss claim.
xii. Is the injury permanent.
In cases in which plaintiff has a permanent injury and
some objective evidence of that injury, there will likely be a
higher settlement value because the case will have more jury
appeal.
xiii. Venue (where the claim will be tried).
It is beyond question that cases tried in certain
locations, particularly urban locations, result in much higher
verdicts than cases tried in more rural counties. This is a
factor that must be taken into consideration in settlement.
xiv. Policy limits and defendant’s assets.
No matter how severe the injury, the plaintiff’s ability
to recover damages against defendant will be limited by either
the defendant’s policy limits or the personal assets of the
defendant.
However, in cases involving motor vehicles, the plaintiff
may have his or her own uninsured or underinsured motorist
insurance which would provide additional coverage for the
plaintiff’s injury and allow the plaintiff to receive further
compensation in a settlement with their own insurance carrier.
xv. Target defendants.
Even though jurors are not supposed to consider the wealth
of a defendant or whether or not the defendant is a
corporation in their verdict, they are far more likely to make
larger awards against large companies than they are people who
they perceive to be middle class or poor. So this becomes
another important settlement consideration.
xvi. Reputation and ability of attorneys.
The claims representative or defense attorney will report
to the insurance carrier or defendant the ability of the
plaintiff’s attorney and the likelihood that the attorney will
try a case and try it well.
In situations in which the defense believes that the
plaintiff’s attorney will not be willing to take the case to
trial, there is little incentive to offer a significant amount
of money in settlement.
On the other hand, if the defense believes that a
plaintiff’s attorney will not only go to trial, but will
receive an optimum verdict, the defense’s risk is increased
and thus the settlement value of the case is increased.
By the same token, plaintiffs must also take into
consideration the reputation and ability of the defense
attorney. If the case is against a good defense attorney,
plaintiff will likely receive less money from the jury; thus,
the settlement value of the case, to some extent, is
decreased.
xvii. Expense of litigation.
The expense of litigation should also be considered in
settlement. There are some cases which, if worked up
properly, could result in the expenses actually being higher
or almost the entire amount of an eventual settlement or
verdict.
Some insurance companies and corporations are cost
conscious and will take into consideration the expense of
proceeding in the case versus early settlement.
However, just because a case may cost the defense $200,000
to litigate does not mean that in a case they otherwise
evaluate as being worth $25,000, they are going to offer the
plaintiff $200,000 in settlement.
Rather, in the above example, it may cause the corporation
or insurance company to raise their offer five or ten thousand
dollars or to try to settle the case early for $25,000 before
expenses are actually incurred. Corporations and insurance
companies are loathe to make offers of settlements based on
the cost of defense because of a concern that they will be
seen as an easy target for plaintiffs.
K. Special Considerations in Litigating Construction
Accident Cases.
i. Attorney handling construction accident cases
must be familiar with the changing law and
common contractor and construction practices.
Obviously, because of the complexity of the law, it takes
a great deal of expertise to litigate construction accident
cases.
When representing a construction worker, the biggest
challenge is usually establishing that someone other than the
injured worker’s employer was responsible, or at least partly
responsible, for the worker’s injury.
This requires knowledge of the usual operation of
construction sites; the relative responsibilities of the
owner, general contractor and various subcontractors to each
other; and a knowledge of construction accident law.
ii. Hiring the right experts.
Investigation in a construction accident case will be
critical and a plaintiff will generally want to consider
hiring an expert witness to help focus the investigation.
There are many types of experts who can testify in
construction accident cases. They include safety experts,
construction practices experts, people with expertise in a
particular trade, accident reconstruction experts, human
factor experts, as well as an economist and other damage
experts.
iii. Understanding the relative
responsibilities between the
contractors and the trades to maximize
recovery for the plaintiff.
Construction accident cases also, generally, involve
complex issues regarding the relative responsibility of the
various potential defendants including the owner, general
contractor and other subcontractors to pay for the plaintiff’s
injury.
Under Proposition 51, a wrongdoer is responsible for
paying 100% of the plaintiff’s economic losses, regardless of
the degree of fault, but is only responsible for paying
general damages, i.e., damages for emotional distress and pain
and suffering, up to its percentage of fault. Thus, an
attorney handling a construction accident case, must litigate
the case in such a way that increases the non-employer
defendant’s degree of fault, and maximizes the plaintiff’s
recovery for economic losses.
iv. Investigation in a construction accident
injury or death case.
The investigation of a construction accident case should
begin before the CAL/OSHA report is finalized, which may take
several months. It is wise for plaintiff’s attorney to
conduct whatever investigation can be performed before the
CAL/OSHA report is completed.
Generally speaking, the plaintiff’s co-employees, employer
and insurance company for the employer should be willing to
aid a plaintiff in the investigation, especially since the
employer’s insurance carrier can potentially “subrogate” or
“get back” some of the benefits it paid to the plaintiff from
other responsible parties. Each contractor and subcontractor
at the scene will generally conduct an investigation and
injury report, and plaintiff should attempt to obtain all of
these reports in the course of litigation.
v. Settlement of a construction accident
injury or death case can be complex due to
worker’s compensation liens.
The settlement of construction accident cases can also be
quite complex. Because, in any case in which there is an
injured worker, there will be a worker’s compensation case,
the interaction between the worker’s compensation case and the
personal injury case against the third party defendants
becomes critical.
vi. Understanding relationship between a
plaintiff’s financial recovery and a
worker’s compensation lien.
The worker’s compensation carrier will generally
“intervene” or file a “lien” on the plaintiff’s personal
injury or death case, wanting to get back all of the money
that it paid to the plaintiff from the other defendants.
Unless the plaintiff can “defeat” the claim of the worker’s
compensation carrier, then the worker’s compensation insurance
carrier gets its money back “off the top” of a verdict before
the plaintiff recovers anything.
This could significantly cut into the plaintiff’s
recovery. In other words, if a plaintiff is awarded $500,000
in damages from a jury, however the worker’s compensation
insurance carrier is entitled to get back $300,000, the
plaintiff’s net recovery after attorney fees and expenses can
be minimal.
vii. Reducing or waiving liens.
Therefore, attorneys who are sophisticated in handling
construction accident cases attempt to obtain a settlement in
which the employer’s insurance carrier significantly reduces
its lien or waives (i.e., gives up) its lien.
This can be done in the right case if the plaintiff can
establish a significant amount of employer negligence, which
can eliminate a lien; a significant chance of the plaintiff
losing, therefore the worker’s compensation carrier should
significantly reduce its lien to help effectuate the
settlement because some reimbursement to the worker’s
compensation carrier is better than nothing; or if the
worker’s compensation carrier is willing to reduce or again,
waive, its lien if plaintiff excuses it from paying for future
medical and disability benefits.
viii. The crippling effect of “credits” to
the worker’s compensation carrier.
An important aspect of liens that is not understood by
many attorneys and plaintiffs is that unless the plaintiff’s
attorney can establish a significant amount of employer
negligence, or the plaintiff’s attorney makes a special “deal”
with the insurance carrier, the carrier gets a “credit” of
the net amount of the plaintiff’s recovery, vis-a-vis
settlement or trial.
A “credit” means that the insurance carrier is not
responsible for paying any future benefits to the plaintiff
until plaintiff “uses up” benefits equal to the amount of
plaintiff’s net recovery, i.e., recovery after attorneys fees
and costs.
In other words, if a plaintiff nets $50,000 in a case,
unless a special settlement is achieved with the worker’s
compensation carrier, the worker’s compensation carrier is not
responsible for paying any future benefits other than
vocational rehabilitation until the plaintiff incurs $50,000
of medical expenses or worker’s compensation disability
payments.
ix. Complexity of construction accident cases
requires retention of an attorney.
Thus, construction accident cases are extraordinarily
complex; however, if a construction worker has received a
serious injury, they should seen the advice of an attorney
before deciding how to proceed.
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