New Jersey § 34:15-40

§ 34:15-40.

Where a third person is liable to the employee or his dependents for an injury or

death, the existence of a right of compensation from the employer or insurance carrier

under this statute shall not operate as a bar to the action of the employee or his

dependents, nor be regarded as establishing a measure of damage therein. In the event that the employee or his dependents shall recover and be paid from

the said third person or his insurance carrier, any sum in release or in judgment

on account of his or its liability to the injured employee or his dependents, the

liability of the employer under this statute thereupon shall be only such as is hereinafter

in this section provided. (a) The obligation of the employer or his insurance carrier under this statute to

make compensation payments shall continue until the payment, if any, by such third

person or his insurance carrier is made. (b) If the sum recovered by the employee or his dependents from the third person or

his insurance carrier is equivalent to or greater than the liability of the employer

or his insurance carrier under this statute, the employer or his insurance carrier

shall be released from such liability and shall be entitled to be reimbursed, as hereinafter

provided, for the medical expenses incurred and compensation payments theretofore

paid to the injured employee or his dependents less employee's expenses of suit and

attorney's fee as hereinafter defined. (c) If the sum recovered by the employee or his dependents as aforesaid is less than

the liability of the employer or his insurance carrier under this statute, the employer

or his insurance carrier shall be liable for the difference, plus the employee's expenses

of suit and attorney's fee as hereinafter defined, and shall be entitled to be reimbursed,

as hereinafter provided for so much of the medical expenses incurred and compensation

payments theretofore paid to the injured employee or his dependents as exceeds the

amount of such difference plus such employee's expenses of suit and attorney's fee. (d) If at any time prior to the payment by the third person or his insurance carrier

to the injured employee or his dependents, the employer or his insurance carrier shall

serve notice, as hereinafter provided, upon such third person or his insurance carrier

that compensation has been applied for by the injured employee or his dependents it

shall thereupon become the duty of such third person or his insurance carrier, before

making any payment to the injured employee or his dependents, to inquire from such

employer or his insurance carrier the amount of medical expenses incurred and compensation

theretofore paid to the injured employee or to his dependents. Where such notice shall have been served, it shall further become the duty of such

third person or his insurance carrier, before making any payment as aforesaid, to

inquire from such injured employee or his dependents the amount of the expenses of

suit and attorney's fee, or either of them in the action or settlement of the claim

against such third person or his insurance carrier. Thereafter, out of that part of any amount about to be paid in release or in judgment

by such third person or his insurance carrier on account of his or its liability to

the injured employee or his dependents, the employer or his insurance carrier shall

be entitled to receive from such third person or his insurance carrier so much thereof

as may be due the employer or insurance carrier pursuant to subparagraph (b) or (c)

of this section. Such sum shall be deducted by such third person or his insurance carrier from the

sum to be paid in release or in judgment to the injured employee or his dependents

and shall be paid by such third person or his insurance carrier to the employer or

his insurance carrier. Service of notice, hereinbefore required to be made by the employer or his insurance

carrier upon such third person or his insurance carrier, shall be by registered mail,

return receipt and in cases other than an individual shall be mailed to the registered

office of such other third person or his insurance carrier. (e) As used in this section, “ expenses of suit ” shall mean such expenses, but not in excess of $750 and “attorney's fee” shall mean such fee, but not in excess of 33 1/3 % of that part

of the sum paid in release or in judgment to the injured employee or his dependents

by such third person or his insurance carrier to which the employer or his insurance

carrier shall be entitled in reimbursement under the provisions of this section, but

on all sums in excess thereof, this percentage shall not be binding. (f) When an injured employee or his dependents fail within 1 year of the accident

to either effect a settlement with the third person or his insurance carrier or institute

proceedings for recovery of damages for his injuries and loss against the third person,

the employer or his insurance carrier, 10 days after a written demand on the injured

employee or his dependents, can either effect a settlement with the third person or

his insurance carrier or institute proceedings against the third person for the recovery

of damages for the injuries and loss sustained by such injured employee or his dependents

and any settlement made with the third person or his insurance carrier or proceedings

had and taken by such employer or his insurance carrier against such third person,

and such right of action shall be only for such right of action that the injured employee

or his dependents would have had against the third person, and shall constitute a

bar to any further claim or action by the injured employee or his dependents against

the third person. If a settlement is effected between the employer or his insurance carrier and the

third person or his insurance carrier, or a judgment is recovered by the employer

or his insurance carrier against the third person for the injuries and loss sustained

by the employee or his dependents and if the amount secured or obtained by the employer

or his insurance carrier is in excess of the employer's obligation to the employee

or his dependents and the expense of suit, such excess shall be paid to the employee

or his dependents. The legal action contemplated hereinabove shall be a civil action at law in the

name of the injured employee or by the employer or insurance carrier in the name of

the employee to the use of the employer or insurance carrier, or by the proper party

for the benefit of the next of kin of the employee. Where an injured employee or his dependents have instituted proceedings for recovery

of damages for his injuries and loss against a third person and such proceedings are

dismissed for lack of prosecution, the employer or insurance carrier shall, upon application

made within 90 days thereafter, be entitled to have such dismissal set aside, and

to continue the prosecution of such proceedings in the name of the injured employee

or dependents in accordance with the provisions of this section. (g) If such employee or his dependents effect a settlement with the third person or

his insurance carrier or institute proceedings against the third person prior to the

service of notice upon the third person or his insurance carrier of the compensation

obligation of the employer or his insurance carrier or prior to the institution of

any proceedings against the third person by the employer or his insurance carrier

for the injuries and loss sustained by such employee or his dependents, such employer

or his insurance carrier is barred from instituting any action or proceedings against

the third person for the injuries and loss sustained by such employee or his dependents. The words “ third person ” as used in this section include corporations, companies, associations, societies,

firms, partnerships and joint stock companies as well as individuals.