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Flanigan v. Department of Labor and Industries3/3/1994
recovery, the benefit provider was reimbursed fully for the cash value of the benefits received pursuant to a statutory lien. Again, the Act accorded the worker benefits where the
recovery was deficient. Laws of 1957, ch. 70, § 23, p. 279. In 1961, the Legislature amended RCW 51.24 to allow the benefit provider to share in litigation costs to the extent that it benefited from recovery. Laws of 1961, ch. 274, § 7, p. 2243.
Under these early versions of the statute, if the lien equaled or exceeded the gross recovery, the benefit provider would take the entire recovery. The Act, thus, provided no incentive for the worker to pursue third party recovery unless assured of a substantial excess recovery. Then, in 1977, the Legislature amended the Act to provide the worker with 25 percent of the recovery remaining after attorney fees, the remainder being subject to reimbursement. Laws of 1977, 1st Ex. Sess., ch. 85, § 4, p. 365. This provided workers with incentive to pursue third party claims even where recovery would be less than the amount of the statutory lien.
In its current form, the Act permits compensated workers or their beneficiaries to proceed against third parties without precluding the worker from receiving benefits. RCW 51.24.020; Clark, at 174. Further, where the worker elects to pursue the third party, the worker is guaranteed 25 percent of the recovery remaining after attorney fees and costs, thus providing an incentive for the worker to pursue third party claims. RCW 51.24.060(1)(b). The Department is then entitled to seek reimbursement from the remaining recovery in the amount of benefits paid. RCW 51.24.060(1)(c). If the third party recovery exceeds these benefits, the worker is entitled to the remainder. RCW 51.24.060(1)(d). The amount of the excess recovery, however, must be expended by the worker in medical costs and other benefits before payment by the Department can be reinstated. RCW 51.24.060(1)(e); Clark, at 175.
RCW 51.24.030 governs actions against third parties and provides in pertinent part:
(1) If a third person, not in a worker's same employ, is or may become liable to pay damages on account of a worker's injury for which benefits and compensation are provided under this title, the injured worker or beneficiary may elect to seek damages from the third person.
(3) For the purposes of this chapter, "injury" shall include any physical or mental condition, disease, ailment or loss, including death, for which compensation and benefits are paid or payable under this title.
RCW 51.24.030. (Italics mine.)
RCW 51.24.060 governs apportionment of the proceeds of third party actions brought by workers or their beneficiaries and provides, in pertinent part:
(1) If the injured worker or beneficiary elects to seek damages from the third person, any recovery made shall be distributed as follows:
(a) The costs and reasonable attorneys' fees shall be paid proportionately by the injured worker or beneficiary and the department and/or self-insurer;
(b) The injured worker or beneficiary shall be paid twenty-five percent of the balance of the award: PROVIDED, That in the event of a compromise and settlement by the parties, the injured worker or beneficiary may agree to a sum less than twenty-five percent;
(c) The department and/or self-insurer shall be paid the balance of the recovery made, but only to the extent necessary
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