Sometimes a workers’ compensation claim can involve more than just the injured empolyee, the employee and the employee’s insurer. On occasion a third party may be involved in acts that contributed to the harm done to the employee, and under Iowa’s workers’ compensation law it is allowable for the employee to collect workers’ compensation benefits and to maintain a separate legal action against the third party.
But what happens if the injured employee is collecting workers’ compensation benefits and prevails against the third party as well? Is the employee allowed to keep both the benefits and the damages award? The answer to this question is that the employer and its insurer have the right to recoup at least some of the amounts paid out in benefits from the judgment against the third party defendant, under the concept of “subrogation.”
Subrogation under Iowa law works in two ways. The first is generally as set forth above, when the employee wins a damages award against a third party for injuries suffered in connection with the same incident that led to the workers’ compensation benefits claim. The second can take place in a situation where for some reason the injured employee does not take legal action against the third party. Here, subrogation can allow the employer and the workers’ compensation insurer to “step into the shoes” of the injured employee for purposes of taking legal action against the third party for compensation.
Subrogation can raise complex legal issues that a post of this length cannot cover, such as rules for how third party damages awards are distributed between the injured employee and the employer and insurer. For more information on how subrogation may affect your workers’ compensation claim, a workers’ compensation law firm can provide answers to questions and assistance in pursuing both workers’ compensation claims and third-party legal actions.