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Third Party

Third Party

In workers’ compensation law, a third party is someone other than you or your employer who is liable for your claim.

You can file a third-party lawsuit against this party to evade some of the limitations imposed by the workers’ compensation system.

Several other uses of the term “third party” frequently occur in personal injury law.

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Third-Party Workers’ Compensation Lawsuits

Third-Party Workers’ Compensation Lawsuits

The workers’ compensation system is designed to handle employee claims against their employer for work-related injuries.

You don’t even have to prove fault against your employer to win your claim. You can receive compensation for medical expenses and lost earnings this way.

In some cases involving work-related injuries, however, you can file a personal injury lawsuit against a third party.

The Limitations of Workers’ Compensation Claims

The primary limitation of workers’ compensation claims is the unavailability of non-economic damages. Non-economic damages include pain and suffering, diminished quality of life, and other intangible losses.

These damages often make up well over half of a personal injury claim, yet they are unavailable through workers’ compensation.

This limitation is enough to motivate many claimants to find grounds to file an ordinary personal injury lawsuit.

When a Third-Party Lawsuit Might Be a Better Option

If the defendant is your employer, you cannot file a personal injury lawsuit. That said, you can pave the way for filing a personal injury lawsuit (and obtaining non-economic damages) by finding a third party to blame for your accident. 

If you suffered a slip and fall accident at a construction site, for example, you might sue the site owner for failing to keep it safe. In a personal injury lawsuit, however, you must prove the defendant was at fault by a “preponderance of the evidence”. 

Other Uses for the Term “Third Party”

Following is a summary of some of the other common uses of the term “third party” in personal injury law.

Third-Party Insurance Claims

Suppose you suffer an injury in a truck accident caused by the truck driver. Since California is an “at-fault” auto insurance state, you can immediately file a claim against the truck driver’s insurance company to recover compensation for the accident. At that point, settlement negotiations usually begin.

In this situation, you are a third party, and your claim is a third-party insurance claim. The insurance contract is between the truck driver and their liability insurance provider. Since you are not a party to the insurance contract, you are a third party.

Third-Party Complaints

Suppose that a plaintiff sues you for money damages. You believe that someone else is ultimately liable for the damages, and you would like to ask the court to hold them liable for whatever amount the plaintiff holds you liable for.

Your solution is to file a third-party complaint against the other party, to bring that party into the case as a third-party defendant. 

This third party acts as a sort of insurance policy for you. If the court accepts it, your third-party complaint ensures that the plaintiff doesn’t hold you liable for anything that the third-party defendant isn’t ultimately liable for paying. 

Third-Party Dispute Resolution

In third-party dispute resolution, the disputing parties agree to bring in a third party to help resolve the dispute. 

The two main types of third-party dispute resolution are mediation and arbitration:

  • In mediation, the parties bring in a third party to encourage the parties to settle voluntarily and to suggest solutions to the dispute. A mediator lacks the authority to impose a solution on the parties.
  • In arbitration, the parties grant the arbitrator the authority to impose a solution on them. An arbitrator is essentially a “rent-a-judge”, typically hired by the disputants because of specialized knowledge and experience in the subject matter of the dispute.

Courts often offer mediation services to the parties to a personal injury lawsuit because settlement reduces crowded dockets.

Third-Party Liability

Third-party liability refers to the liability of one party for some or all of the damages caused by another party. Following are some common examples:

  • Employers typically bear civil liability for the on-duty wrongful acts of their employees.
  • Liability insurance companies bear third-party liability for their insured up to the limits of their policies
  • Alcohol vendors sometimes bear liability for injury accidents arising from providing alcohol to an underage patron.

Many other types of third-party liability exist, some of which are unrelated to personal injury law. A contract, for example, might have a “third-party beneficiary” who is eligible to sue under the contract.

You Will Probably Need a Lawyer for This One

Many legal actions involving third parties are complex undertakings that you should not try to resolve on your own.

An experienced personal injury lawyer, however, should have experience with hundreds of third-party actions. Even if you plan to settle out of court, your lawyer can negotiate your claim with the opposing party.