What is a third-party claim?

If someone other than an employee's co-worker or employer caused their workplace injury or illness, they may take legal action against this “third party.” The purpose of third-party law is to shift the cost of industrial insurance onto the responsible party. These recoveries replenish the workers’ compensation trust funds. Claim costs are reduced or eliminated, depending on the amount recovered.

Learn more about third-party claims for workers and Third Party for Employers.

For Attorneys

    If L&I is the lien holder, what should I do?

    Notify us if your client decides to pursue recovery from the third party. Send us the completed election form and a letter of representation with a signed medical authorization.

    If settling the case will result in less than the entitlement, what do I do?

    Contact us to request our written approval. Provide written documentation to substantiate your request for approving a deficient settlement.

    RCW 51.24.090 -- Compromise or settlement less than benefits

    RCW 51.24.060 -- Distribution of amount recovered – Lien

    What happens if I settle a case without L&I’s written approval and it’s deficient?

    By law, the settlement is void. We may petition the court for an order assigning the cause of action to L&I.

    What is a third party excess recovery?

    If there is an excess recovery from the settlement, it must be used to offset future workers’ compensation payments for medical treatment, time-loss, permanent partial disability and pension. No further payments will be made to the worker, or on their behalf, under that specific claim until the excess is expended.

    Providers will continue to bill L&I for treatment. We adjust bills according to the Medical Fee Schedule. The authorized amounts will be credited against the excess, but not paid, and notice sent to worker. We will also notify the providers of the amount that is the worker’s responsibility to pay. Once the excess recovery is spent, we will resume paying benefits, if they are entitled to receive them.

    Do I need to let you know when I file a complaint?

    Yes, you must give us notice when you file suit. We ask that you send a copy of the conformed complaint to us so we may file our Notice of Statutory Interest.

Special Assistant Attorney General program

    What is the Special Assistant Attorney General (SAAG) program?

    We may contract with private attorneys appointed by the Washington State Assistant Attorney General (AAG) to litigate certain third-party cases assigned to the L&I (RCW 51.24.110).

    How do I apply?

    Contact us for an application. You will receive an appointment letter from the L&I’s Division Chief at the Office of the Attorney General, indicating that you will serve at the pleasure of that office. Sign the letter to agree with the terms, and forward the letter to us. Then, we place your name on a list of attorneys eligible for referrals. Referrals are generally made by county on a “next on the list” basis.

    What are my responsibilities if I accept appointment to this program?

    Unless you are representing L&I in a specific case, you must not refer to yourself as a “special assistant attorney general” or include that designation in any correspondence or pleadings relating to your services. When under contract, you must follow L&I’s performance requirements outlined in the contract. Violating these conditions may result in removal from the list of eligible attorneys and could lead to cancellation of your appointment.

    What happens if I accept a case?

    You will be sent a contract outlining the terms and conditions of your services and performance requirements. Please sign and return it to us. Do not start any work until you receive a copy of the properly executed contract from L&I.

    Who do I represent if I accept a case?

    You represent the Department of Labor & Industries. L&I is your client. Any legal action you bring is in the name of the injured worker, but the real party of interest is L&I, which was assigned the cause of action. L&I must authorize all of the decisions in the case, including but not limited to: pre-approving threshold costs, authorizing settlements, proceeding to trial, and other pertinent aspects.

    How much is my fee for services, and when do I get paid?

    Our fee schedule is 25% before filing suit, 33.3% after filing suit, and 40% for an appeal. These may vary for medical or legal malpractice suits. Costs are advanced by the attorney and reimbursed according to L&I policy outlined in the contract.

Related Resources

Mailing address

Washington State Department of Labor & Industries
Third Party Unit
PO Box 44288
Olympia WA 98504-4288