Hurt on a NJ construction site: workers' comp and third-party claims

Two tracks: workers' comp and a third-party claim

Construction injuries often involve two separate legal tracks that run at the same time. The first is workers' compensation, which pays medical treatment and wage benefits no matter who was at fault. The second is a regular injury lawsuit against someone other than your employer whose negligence helped cause the accident.

These tracks are different in important ways. Comp is no-fault but limited: it does not pay for pain and suffering. A third-party lawsuit requires proving negligence, but it can cover the full range of damages, including pain and suffering and full lost earnings.

Construction sites are a common place for third-party claims because so many companies share the space. The general contractor, subcontractors, the property owner, the crane or scaffold rental company and equipment manufacturers may all have had a role in safety.

Why you usually can't sue your own employer

New Jersey's Workers' Compensation Act is built on a trade-off. Your employer provides no-fault benefits, and in exchange, N.J.S.A. 34:15-8 generally bars lawsuits against the employer and against coworkers for work injuries. This is often called the exclusive remedy rule.

The one statutory exception is an intentional wrong. The New Jersey Supreme Court has made that exception narrow. In Laidlow v. Hariton Machinery (2002), the Court explained that the employer must have known its conduct was substantially certain to cause injury or death, and the situation must go beyond the ordinary risks of industrial work. In that case, an employer that disabled a safety guard and fooled OSHA inspectors by turning it back on only during inspections could face a lawsuit. Ordinary carelessness, even serious carelessness, does not meet this standard.

Who else might be responsible

A third-party claim depends on which company controlled the hazard. Some common examples:

• A general contractor that ran the site and knew about a dangerous condition
• Another subcontractor whose crew left an unguarded opening, debris or a live wire
• A property owner who kept control over part of the work or the premises
• The maker or seller of a defective scaffold, ladder, lift, harness or power tool
• A driver of a delivery truck or equipment operator employed by another company

Common ways construction workers get hurt

Falls are the injury most people picture: from scaffolds, ladders, roofs, lifts and unprotected floor openings. But construction sites produce many other serious injuries, including being struck by falling tools or materials, trench collapses, electrical contact, crushing injuries from heavy equipment, and machinery without proper guards.

The type of accident shapes who may be responsible. A fall through an unmarked opening points toward whoever controlled that part of the site. A ladder or harness that failed points toward the manufacturer or the company that supplied it. A crash with a delivery truck points toward that driver and their employer. Identifying the right parties early matters because each one may have its own insurer, and some companies on site may already be gone by the time a claim is made.

Keep in mind that the exclusive remedy rule also protects coworkers. Under N.J.S.A. 34:15-8, a person in the same employ as you generally can't be sued for an on-the-job injury unless the act was an intentional wrong.

How OSHA rules fit in

In New Jersey, private-sector construction is covered by federal OSHA. The state's own PEOSH program covers state and local government workers. OSHA's construction rules are detailed. For scaffolds, 29 C.F.R. 1926.451 requires fall protection for workers on a scaffold more than 10 feet above a lower level, inspection by a competent person before each shift, and a scaffold strong enough to hold at least four times its maximum intended load.

An OSHA violation does not by itself create a lawsuit. In Alloway v. Bradlees (1999), the New Jersey Supreme Court held that an OSHA violation is not an independent basis for a tort claim. But the Court also said OSHA rules are relevant to deciding what duty of care a contractor owed, and a general contractor can owe a duty to a subcontractor's employees. So an OSHA citation, or a clear failure to follow OSHA rules, can be strong evidence in a negligence case.

New York has a well-known Scaffold Law that can make owners and contractors strictly liable for certain falls. That is a New York statute. New Jersey claims are decided under ordinary negligence and comparative fault rules, and under N.J.S.A. 2A:15-5.1 you can still recover if your share of fault is not greater than the defendants', with your damages reduced by your percentage.

The comp lien: what happens when you win a third-party case

If you collect comp and then recover money from a third party, you generally don't keep both in full. Under N.J.S.A. 34:15-40, your employer or its insurance carrier is entitled to be reimbursed out of the third-party recovery for what it paid, after your costs and attorney fee are taken into account. If the recovery is less than what comp would owe you, the carrier keeps paying the difference.

Timing matters here too. If you don't sue or settle with the third party within one year of the accident, the statute lets the employer or carrier bring the third-party claim itself after a written demand and a 10-day wait. And settling a third-party case without accounting for the lien can create real problems. Coordinating both tracks is one of the main reasons construction workers hire counsel.

Deadlines to keep in mind

For comp, tell your employer about the injury right away. N.J.S.A. 34:15-17 says benefits aren't due until notice is given if it isn't given within 14 days, and generally no compensation is allowed if the employer gets neither notice nor knowledge within 90 days. A formal comp claim petition must generally be filed within two years after the accident, or within two years after the last comp payment if some benefits were paid (N.J.S.A. 34:15-51).

A third-party injury lawsuit falls under New Jersey's general two-year personal injury statute of limitations. If a public entity owned the site or the equipment, a written notice of claim may be due within 90 days under the Tort Claims Act.