A third-party claim is a personal injury lawsuit against someone other than your employer whose negligence or defective product caused your work injury. California's workers' compensation system generally bars suing your employer, but it does not protect drivers, property owners, equipment manufacturers or other contractors. A third-party claim can recover pain and suffering and full lost earnings, which workers' compensation does not pay.
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| Suing your employer | Generally barred; workers' comp is the exclusive remedy (Labor Code § 3602) |
|---|---|
| Who can be liable | Drivers, property owners, equipment makers, other contractors |
| Deadline to sue | Generally two years for injury (Code Civ. Proc. § 335.1) |
| Claims against a public entity | Written claim generally within six months (Gov. Code § 911.2) |
| Insurer's reimbursement | A lien on the recovery and a credit against future benefits (§§ 3852, 3856, 3861) |
| Attorney fees | Workers' comp around 15%, WCAB-approved; injury claim 33% contingency, case costs may apply |
What is a third-party claim in a work injury case?
A third-party claim is a personal injury lawsuit against someone other than your employer whose negligence or defective product caused your work injury. It runs alongside your workers’ compensation claim, not instead of it.
Workers’ compensation pays for medical care and part of your lost wages, regardless of fault. However, it does not pay for pain and suffering, and it caps wage replacement. A third-party claim fills that gap because it follows ordinary California injury law. Under that law, the responsible party pays the full measure of damages it caused.
Not every work injury has a third party. When one exists, it often changes the overall value of the case more than anything else.
Why can’t you usually sue your employer?
You usually cannot sue your employer because Labor Code § 3602 makes workers’ compensation the exclusive remedy against the employer for a work injury. That is the bargain at the center of the system. Employees receive benefits without proving fault, and in return employers gain protection from injury lawsuits.
The exceptions in § 3602 are narrow. They include a willful physical assault by the employer and an employer’s fraudulent concealment of an injury that makes it worse. Certain injuries from defective products the employer manufactured and sold also qualify. Under Labor Code § 3706, you can also sue an employer that failed to carry workers’ compensation insurance directly.
The same protection generally extends to coworkers, with limited exceptions such as a willful and unprovoked physical act of aggression. The third-party claim usually points outward, at someone outside the employment relationship.
Who can be liable in a third-party work injury claim?
Anyone other than your employer and coworkers can be liable in a third-party claim if their carelessness or defective product caused the injury. Under Civil Code § 1714, every person is responsible for injuries caused by a failure to use ordinary care.
- Other drivers A driver who hits you while you are making deliveries, driving between job sites or running a work errand. See car accident claims.
- Other contractors On construction sites, a general contractor or subcontractor who is not your employer and created or ignored a hazard. A construction injury is often both a workers’ comp claim and a third-party case at once; see construction site injuries for how the two fit together.
- Property owners The owner or manager of premises where you were working, if a dangerous condition caused the injury. The page on slip and fall claims explains how premises liability works.
- Manufacturers The maker or seller of a defective machine, tool, ladder or safety device, under product liability law.
- Public entities A city, county or transit agency responsible for a dangerous road or public property, subject to much shorter claim deadlines.
What can a third-party claim recover that workers’ comp cannot?
A third-party claim can recover pain and suffering, full lost earnings and loss of future earning capacity. By contrast, workers’ compensation pays none of these in full. Workers’ comp, in turn, pays regardless of fault, which a third-party claim does not.
| Workers’ compensation | Third-party claim | |
|---|---|---|
| Fault required | No | Yes, the third party’s negligence or a product defect |
| Lost wages | Partial, within state limits | Full past and future earnings |
| Pain and suffering | Not paid | Recoverable |
| Your own share of fault | Does not reduce benefits | Reduces damages proportionally |
| Where decided | Workers’ Compensation Appeals Board | California Superior Court |
How does the workers’ comp insurer get repaid from a third-party recovery?
The workers’ comp insurer has a right to reimbursement from a third-party recovery for benefits it paid. It can also take a credit against future benefits. These rights come from Labor Code §§ 3852, 3856 and 3861, and they prevent you from collecting twice for the same loss.
- The lien The insurer can claim repayment of medical and disability benefits already paid, out of the third-party recovery.
- The credit The insurer can ask the WCAB for a credit against future benefits. It can reach the amount you net from the third-party case.
- Its own lawsuit The employer or its insurer can sue the third party directly, or join your lawsuit, to recover what it paid.
- Employer fault If your employer’s own negligence contributed to the injury, it can lose some or all of its reimbursement rights.
The lien is often negotiable, particularly where the insurer benefits from the work done to obtain the recovery. How the parties resolve it can change what you keep more than the headline settlement figure does.
What deadlines apply to a third-party work injury claim?
You must file most third-party injury claims in California within two years of the injury under Code of Civil Procedure § 335.1. Claims against a public entity require a written government claim, generally within six months, under Government Code § 911.2.
These deadlines run separately from the workers’ compensation deadlines. Reporting the injury and filing a workers’ comp claim on the DWC-1 does nothing to preserve a third-party claim. Likewise, a third-party lawsuit does nothing to preserve the workers’ comp claim. The page on personal injury deadlines covers the exceptions.
Evidence in a third-party case disappears faster than in a workers’ comp case. Repair shops fix vehicles, companies replace equipment and crews clean up sites. Preserving it early is usually more urgent than the filing deadline itself.
What if you were partly at fault?
Being partly at fault does not bar a third-party claim in California. Instead, it reduces the damages by your percentage of fault. The California Supreme Court adopted this pure comparative fault rule in Li v. Yellow Cab Co.
Your share of fault has no effect on workers’ compensation benefits, which the insurer pays regardless of fault. So the same facts can matter a great deal in one case and not at all in the other. The third party will almost always argue that you, your employer or someone else shares the blame.
How do the two cases run together?
The workers’ comp case and the third-party case proceed in different forums, on different timelines. Even so, they share medical evidence and affect each other’s settlements. Coordinating them from the start avoids surprises at the end.
Workers’ comp benefits usually start first, paying for treatment while the third-party case develops. Under Labor Code § 3853, you must notify the employer of a third-party lawsuit, and it can join. Settling one case without accounting for the other can leave you with an unexpected lien. It can also leave a credit that stops future benefits. The workers’ comp settlements page explains how the compensation side closes.
What does it cost to bring both claims?
Each claim has its own fee, and the two are never combined. For the workers’ compensation claim, the attorney’s fee is typically around 15% of the award. A workers’ compensation judge approves it under Labor Code § 4906, and it is paid from the award, with nothing up front.
The third-party claim is a personal injury case handled on a 33% contingency. There is no attorney’s fee unless there is a recovery, but you may remain responsible for case costs and expenses. The fees and consultations page sets out both models. Your first consultation is free, takes about thirty minutes and covers both claims.