Third Party Actions Policy 46-220 | Effective Date: August 9, 2021

WorkSafeNB administers a no-fault insurance system for workplace injuries, whereby employers are held collectively liable and injured workers are prevented from launching legal actions. Under the WC Act, there are, however, three situations in which a worker or dependent may sue another person because of an accident that occurred in the course of their employment. These are when:

• The worker has a workplace accident involving a third-party not covered under the WC Act;
• The worker has an accident involving a motor vehicle, or
• The worker has an accident involving transportation by a mode of transport requiring liability insurance (for example, bus, taxi, or airplane).

In situations involving a motor vehicle or a mode of transport, the injured worker may sue an employer (except their own) or a worker (except a co-worker) covered under the WC Act. In all three situations, the worker must elect either to pursue a legal action, or to claim compensation and subrogate their right to sue to WorkSafeNB.

In the case of federal government employees, the rights of the worker and the employer regarding legal actions are governed by the Government Employees Compensation Act (GECA) and managed by the federal government.

Interpretation

Election Process in Third-Party Actions

1. When there is evidence that a third-party who is not immune from liability under the WC Act may have been involved in a workplace accident, WorkSafeNB sends a notice of election to the injured worker or dependent, who then must complete the form within three months after the date of accident, and return it to WorkSafeNB choosing to either:

• Sue the third-party; or,
• Claim compensation from WorkSafeNB.

The Injured Worker or Dependent Sues Third-Party

2. When an injured worker or dependent chooses to sue the third-party, they forfeit their entitlement to compensation benefits for the injury.

3. WorkSafeNB will pay the difference between the amount paid in any settlement or judgement obtained by the worker, and what the worker would have been entitled to under the WC Act if:

• WorkSafeNB approves the lawsuit in writing before a settlement is accepted or judgement is made; and,
• The settlement or judgement is less than what the injured worker or dependent would have received from WorkSafeNB if they had elected to claim compensation.

Injured Worker or Dependent Claims Compensation

4. When a third-party is involved in an accident, and the injured worker or dependent claims compensation, WorkSafeNB is subrogated the right to sue the third party.

5. If the worker’s claim for compensation is accepted, the file is then sent to WorkSafeNB’s General Counsel, who decides whether to sue the third-party. If the costs of bringing an action outweigh the benefits, WorkSafeNB may decide not to sue.

WorkSafeNB Sues Third-Party

6. If WorkSafeNB decides to sue the third-party, upon settlement or judgement, WorkSafeNB:

• Retains a portion of the money to cover the costs of the claim, legal fees, and administration costs;
• Provides the injured worker with any excess amount; and,
• Provides the employer with cost relief. For more information, see Policy 21-300 Allocation of Claim Costs.

Throughout this process, WorkSafeNB continues to pay eligible compensation benefits to the injured worker.

Right to Sue Third-Party Returned to Injured Worker or Dependent

7. When WorkSafeNB decides not to sue the third-party, the right to sue is returned to the injured worker or dependent, who may then proceed with a lawsuit while receiving benefits. The following conditions must be met:

• The costs of the benefits paid to the worker by WorkSafeNB are claimed in the action against the third-party;
• WorkSafeNB is reimbursed the claim costs paid, or to be paid, on behalf of the injured worker;
• WorkSafeNB has no responsibility to pay any court costs or legal fees incurred in bringing the third-party action; and,
• Full information on the amount of the settlement or judgement is disclosed to WorkSafeNB.

Once WorkSafeNB receives reimbursement of the claim costs, WorkSafeNB ensures that the accident employer is relieved of the claim costs up to the amount reimbursed. WorkSafeNB continues to pay benefits to the injured worker.

Delegation

8. The President/C.E.O. may delegate authority to WorkSafeNB’s General Counsel to negotiate settlements while pursuing a third-party action, or to negotiate cost recovery amounts when an injured worker or dependent pursues legal action.

Federal Government Employees

9. If a federal government employee has a workplace accident in New Brunswick involving a third-party, the federal Government Employees Compensation Act (GECA) directs that the worker must choose to either claim compensation or bring an action against the third-party. The GECA sets out a three-month statutory limitation period after the occurrence of the accident in which to make this election. Upon choosing to claim compensation, any rights the employee has against the third-party are subrogated to the federal government and not WorkSafeNB.