You have a client who was hurt on the job. The third-party case is the one you want. The compensation claim is the one you cannot ignore — because it runs on its own deadlines, it puts a lien on your recovery, and it can quietly cost your client the rest of their benefits if it is settled in the wrong order.
That is the part this office takes. Workers’ compensation hearings in New York are held virtually, so a referral does not depend on where your client is — these cases come in from across the state.
The comp claim is not a side issue in your case
It touches the third-party action at nearly every stage, and mostly not in your favor unless somebody is watching it.
The carrier will ordinarily have a lien on your recovery. It will also take a credit against future compensation, under Section 29(4), which makes it liable only for the deficiency between what your client actually collects and the compensation due. Burns confirms that what is ’actually collected’ means the recovery net of litigation costs, so the credit is measured against the net, and against what is left after the lien is repaid. The medical evidence being built in the comp file — the carrier’s independent medical exams, the treating physician’s permanency opinion, the deposition testimony of both — is material that can find its way into your case, cutting in whichever direction it was allowed to develop. Board records are confidential under Section 110-a and reach a third-party defendant only by the claimant’s authorization, subpoena or court order, and a Board determination carries no collateral estoppel effect in your action except on the employment relationship. What tends to hurt is the content of the medical proof, not the Board’s findings. And where the claim is contested, your client will be giving sworn testimony at hearings while your case is pending.
None of that is a reason to avoid the comp claim. It is a reason to have somebody handling it who knows it is sitting next to a third-party action.
Where the two cases collide
The lien, and the credit nobody warns the client about
Under Section 29(1), the carrier has a lien on the proceeds of the third-party recovery — and it reaches further than most people assume. The statute covers compensation awarded, provided or estimated, and medical expenses paid or to be paid, not merely what the carrier has disbursed to date. Value the lien on what it has paid so far and you will be short.
The statute provides for deduction of the reasonable and necessary costs of obtaining the recovery, including legal fees. The carrier’s equitable share of those costs is a judicial doctrine rather than statutory text — Matter of Kelly v. State Ins. Fund, 60 N.Y.2d 131 (1983), refined in Burns v. Varriale, 9 N.Y.3d 207 (2007) — apportioned according to the total benefit the carrier receives, including its relief from future payments. Where those future benefits are not quantifiable, as with a non-schedule permanent partial disability, Burns holds the carrier’s share cannot be fixed in a lump sum at settlement.
Consent to settle, and the order it has to happen in
This is the one that does real damage. A third-party case cannot be settled for less than the compensation the statute provides without the carrier’s written consent, or a compromise order from a justice of the court in which that action was pending — and that order has to be secured within three months of the settlement. The court-order route is not open-ended. Courts have held that settling without either can forfeit the client’s future compensation benefits: Matter of Johnson v. Buffalo & Erie County Private Indus. Council, 84 N.Y.2d 13 (1994). Relief after the fact is discretionary, and the claimant has to show the settlement was reasonable, that the delay was not his own fault or neglect, and that the carrier was not prejudiced. All of which is to say this is handled before the settlement rather than cleaned up afterwards.
The six-month rule, and its precondition
Where the client has taken compensation, the third-party action has to be commenced not later than six months after the awarding of compensation, and in any event within one year of accrual, or the cause of action is treated as assigned to the carrier. That one-year outer limit is the harder trap of the two. The assignment only operates where the carrier first served written notice — by personal service or by certified or registered mail, return receipt requested — at least thirty days before the period expires; a compliant notice also extends the time to sue until thirty days after the notice. The underlying statute of limitations runs separately and is longer. The Section 29 clock is almost always the one that expires first.
Who is actually suable
Compensation is the exclusive remedy against the employer, subject to narrow exceptions. A third party can implead the employer for contribution or indemnity on proof of a grave injury as the statute enumerates it, or where the employer expressly agreed to indemnification in a written contract entered into before the accident. The second route is common on construction sites and is often the one that matters. On a construction site, the claims that matter run against owners and general contractors under Labor Law sections 240(1), 241(6) and 200. Sections 240(1) and 241(6) carry a statutory exception for owners of one- and two-family dwellings who contract for but do not direct or control the work; section 200 does not. The limits that do the most work are judicial rather than statutory: section 240(1) reaches only elevation- or gravity-related hazards (Rocovich, 78 N.Y.2d 509; Ross v. Curtis-Palmer Hydro-Elec. Co., 81 N.Y.2d 494), section 241(6) requires a specific, positive command of the Industrial Code rather than a general safety standard (Ross), and section 200 codifies the common-law duty and generally turns on supervision or control.
What happens to a case you send here
You keep the third-party case. This office takes the compensation claim and runs it: the C-3 filing, the hearings, the independent medical exams, the permanency workup, schedule loss of use or classification, and any appeal.
What that is meant to give you is communication. A comp claim that is being actively worked rather than parked, and counsel on the comp side who tells you when something in that file touches yours:
- The carrier’s IME reports and the treating physician’s permanency opinion, as they come in.
- Transcripts where the medical experts are deposed.
- The lien figure, and what it is actually composed of.
- Notice before anything is resolved on the comp side. A Section 32 settlement in particular: once the Board approves it, the decision is not subject to review, and there is only a ten-day window after submission in which an interested party can ask the Board to disapprove. That window is when anything affecting your case has to be raised.
Your client gets one office handling the comp claim and one handling the lawsuit, with the two talking to each other.
The referrals that come in most often
- Construction falls and falling-object injuries, where a Labor Law claim runs alongside the comp file.
- Workers struck by vehicles or equipment on a job site.
- Defective or unguarded machinery, where the manufacturer or the maintaining contractor is the target.
- Premises cases where the client was working on someone else’s property.
- Cases where another attorney has a comp claim that has stalled, been controverted, or reached permanency and needs someone to take it from there.
How to send one over
Call the office directly. What is useful at the outset is the client’s contact information, the date of accident, the employer, whether a C-3 has already been filed, and anything the carrier has sent so far — particularly a notice of controversy, which starts clocks of its own.
If you are not sure yet whether there is a comp claim worth pursuing, or where a comp issue sits in relation to your case, that is a conversation rather than a referral. Call anyway.
What your client experiences on the comp side
Most construction referrals arrive with the compensation claim already placed, often with a firm your office works with regularly. That arrangement is ordinary and frequently works well. Where it does not, you tend to find out late, and you tend to find out from the client.
The complaint is almost always the same one, and it is usually not about competence. It is that a different attorney appeared at every hearing, that whoever appeared did not have the history of the file, and that there was nobody to call afterwards who could say what had happened or what came next. A claim can be handled adequately and still leave the claimant feeling like a docket number.
This office is built around the opposite arrangement. Covering counsel appears at hearings here as it does everywhere. The difference is that one attorney owns the claim from start to finish, the covering attorney reports back directly after each appearance, and the direction of the claim is set from those reports rather than left to whoever is available next time. The claimant speaks to the attorney who owns the file about what happened at the hearing and what has to happen before the next one, instead of trying to track down whoever covered it.
For a referring attorney that matters for a practical reason as well as a decent one. A client who feels unheard on the compensation side goes looking for advice, and the advice they come back with is rarely confined to the compensation claim.
And the part that touches your file directly: the compensation lien and the carrier’s credit are settled at the point the third-party case resolves. Those are easier to handle when the compensation claim has been run with the third-party action in view from the start, and when there is one person on the other end of the phone who has been there the whole time.
We wrote the book on New York workers’ comp.
Not a figure of speech. The New York Workers’ Compensation Book runs fifty-eight pages on how a claim actually runs here — notice and filing, the medical evidence the Board needs, independent examinations, schedule loss of use and classification, section 32, and the lien and credit questions that reach straight into your third-party case. It is free, it downloads without a form, and you are welcome to send it to a client while you are still deciding whether to refer the comp claim at all. Download it here.
Talk to a Staten Island workers’ compensation attorney
The Law Offices of Frank J. Dito, Jr. handles workers’ compensation claims from the office in Staten Island, including cases referred by personal injury attorneys throughout New York State. Because hearings are virtual, distance is not a constraint.
Call 718.701.2776 or 800.310.5520
1610 Richmond Road #200, Staten Island, NY 10304
Attorney Advertising. The information on this page is general and is not legal advice.