Third Party Actions
Effective date: November 1, 2014
Application: Applies to all claims involving third parties.
Policy subject: General
To provide guidelines for the management of third party actions.
Customer means an injured worker or a surviving dependant.
Third party, for the purpose of this policy, means a person or entity that is not a worker or employer within the meaning of The Workers’ Compensation Act, 2013 (the “Act”).
Subrogation means the substitution of one person or group by another in respect of a debt or insurance claim. This includes the transfer of any associated rights and duties. For the purpose of this policy, the right of subrogation arises when the Workers’ Compensation Board (WCB) pays claim costs for a customer and then attempts to recover these costs from the third party responsible for the work injury.
Third party action means a civil claim to recover damages suffered by the customer as the result of a work injury caused by the actions or neglect of a third party. The customer or the WCB would bring legal action against the third party.
- When a customer has a right of action against a third party with respect to a work injury, and the customer is entitled to WCB benefits, the customer (Section 38):
- Will receive compensation, and
- May bring legal action against the third party.
- The Act provides the WCB with the right of subrogation (Section 39). To recover claim costs, the WCB may:
- Bring legal action in its own name against the third party, or
- Join with the customer in their legal action against the third party.
- Before the customer receives any money, the WCB will recover money for the claim costs and the WCB’s share of the legal costs. Any sum remaining after the WCB’s recovery is payable to the customer (Section 40).
- When a customer plans to take legal action against a third party they must provide written notice to the WCB. Likewise, the WCB will provide written notice if it plans to take action. In either situation, failure to give notice does not affect the claim of action (Section 41).
- The WCB must provide written approval for any settlement that is less than the amount of the claim costs provided under the Act (Section 42).
- A customer cannot sue an employer or worker covered under the Act with respect to a work injury. They may, however, take action against a third party not covered under the Act.
Workers’ Right to Bring Action
- Customers, who have a right of action against a third party not covered by the Act, are entitled to:
- Receive compensation, and
- Take action against the responsible third party.
- Customers must give notice to the WCB of their intention to take action. The WCB will advise the customer or their representative of the WCB’s claim in the third party action.
- If the customer chooses not to take action, the WCB will review the case to determine whether it should take action to recover the costs of the claim.
- The WCB will only seek recovery on an accepted claim that is work related.
- The WCB will not seek recovery when the claim is for a worker covered by the Government Employees Compensation Act (GECA).
- When the WCB takes action against a third party it will seek only to recover the damages for which the WCB has paid or will pay for future claim costs. The WCB will not pursue any part of the action on behalf of the customer.
Employer Cost Relief
- The WCB will provide respective employers cost relief when it is successful in recovering all or part of the claim costs through subrogation or through its own action.
Distribution of Settlement Funds
- The WCB may:
- Keep the entire settlement if the settlement is less than the amount of the customer’s claim, or
- Where circumstances warrant it, the WCB may negotiate a fair and reasonable settlement.
- If the amount of the settlement is greater than the claim costs and any anticipated future costs, the WCB will:
- Keep the funds recovered for current and future costs, and
- Pay the remainder to the customer.
Approval of Settlements
- The Board Members give the Chief Executive Officer (CEO) the authority to approve settlements. The CEO may give this authority to the Corporate Solicitor.
- The WCB must provide written approval for a settlement that is for an amount less than the claim costs.
(1) January 1, 2014. References updated in accordance with The Workers’ Compensation Act, 2013.
(2) POL and PRO 04/2007, Third Party Actions/Subrogation (effective May 1, 2007 to October 31, 2014).