When an employees negligence caused another employee to be injured at work, it was referred to as:

When a worker is injured on the job, he or she can bring a workers’ compensation claim. Workers’ compensation benefits are awarded without the need to prove fault on the employer’s part. However, in some cases, the injured worker can also bring a third-party liability claim. “Third-party liability” refers to bodily injury caused to a person because of a negligent or reckless third party’s actions or omissions.

Third-party liability may arise when an individual or entity that is separate from the employer causes the workplace accident. Usually, it is not available against an employee’s supervisor or coworker. Instead, third-party liability may arise out of other common situations, such as manufacturing or design defects, drivers who cause car accidents that injure a worker on the job, and owners of businesses that a worker visits as part of a job.

For example, if a worker is on the road for work, and a drunk truck driver crashes into him, the worker can recover workers’ compensation benefits, but he can also sue the truck driver and the trucking company. Most workers’ compensation payments are minimal, and a worker may not be able to recover enough compensation to fully cover his or her medical expenses and lost income through workers’ compensation alone. Moreover, workers’ compensation doesn’t cover pain and suffering, mental anguish, or punitive damages. In a third-party liability claim, the worker would be able to ask the court for noneconomic damages and punitive damages.

Similarly, if a chair breaks at work because of a defective leg, and you suffer serious hip injuries, you may be able to bring a third-party claim against the product manufacturer. Or if you fall on a bathroom floor that a client’s janitorial service left wet without any warning signs and get hurt, you may be able to bring a third-party liability claim against the cleaning company.

With third-party liability claims, it is necessary to prove the third party’s negligence and fault, or other wrongful acts or omissions. To prove the third party’s negligence, the plaintiff will need to prove duty, breach of duty, causation, and damages. However, if the plaintiff makes the claim against a product manufacturer, it may be possible to raise a strict liability claim in which the product manufacturer can be held liable just by proving that there was a defect and that it caused the plaintiff’s harm.

An insurer may have a subrogation interest in a worker’s personal injury claim.

When an injured employee claims that a third party negligently caused his or her injury, the company’s insurance carrier may have a subrogation interest in the claim and can enforce the third party’s liability in the name of the injured employee. Each state has its own rules regarding subrogation and an employer’s or carrier’s right to recover the benefits that were paid to the employee.

The subrogation interest that can be recovered is usually limited to the amount of workers’ compensation benefits that were paid to the employee. In most cases, if the recovery is for an amount greater than the subrogation interest, the insurance carrier can get reimbursed and pay the remainder to the injured employee.

Last reviewed October 2021

1.3.3.1 Negligent third party recoveries | 1.3.3.2 Recovery potential - third party examples | 1.3.3.3 Third party liability | 1.3.3.4 Contributory negligence

A third party has a liability to reimburse WorkSafe, in whole or in part, if their negligence contributed to a worker’s injury.

The legislation provides for WorkSafe to be proportionally indemnified by a negligent third party if they caused death or injury.

The liability of the third party is limited to an amount that the third party would but for the legislation, be liable to pay to the worker at common law.

The legislation enables WorkSafe to recover compensation paid and the excess paid by an employer. The decision to recover the employer excess is at the sole discretion of WorkSafe and there is no right of appeal.

It is recommended that claims be reviewed for recovery potential.

If the claim is:

1.3.3.1 Negligent third party recoveries

If the Agent considers there is recovery potential, they are to contact the Recoveries Team at WorkSafe.

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1.3.3.2 Recovery potential - third party examples

This section contains examples of third party negligence, grouped into the following broad risk The probability of the worker not returning to work is known as the risk or risk factor. For example: if a worker is likely to return to work, the claim is categorised as low risk. categories.

Designers, suppliers, manufacturers & service maintenance

Examples in this category are:

• a piece of machinery is designed with inadequate guarding devices
• a person supplies goods such as asbestos that are known to be dangerous
• a person supplies improperly labelled goods that cause injury when subjected to processing
• machinery is manufactured with inadequate or substandard materials and/or does not comply with Australian Safety Standards and cause a malfunction or breakdown of equipment leading to injury
• contractors/suppliers provide inadequate servicing or substandard maintenance which causes a malfunction or breakdown of equipment leading to injury.

Owner & occupier liability

Examples in this category are:

• a staircase in a building owned by someone other than the employer has an inadequate handrail, poor lighting and the leading edges of the steps are damaged and slippery. A worker walking down the stairs does not see a damaged step in the dim light and loses balance. Because of the inadequate hand rail, they fall and sustain injury
• in many cases, workers may be engaged to perform work at premises other than those owned by the employer. In the previous example, a legal liability may be created in either or both the owner or occupier
• a poorly maintained lift in a third party's premises moves up and down (bounces) after the lift doors have opened. A worker visiting the premises trips over the edge of the floor when attempting to exit the lift and suffers injury
• poor ventilation and/or poor maintenance of air conditioning units in a work site not owned or controlled by the employer causes the worker to suffer respiratory illness
• floor space is inadequately cleaned and maintained, causing a worker to slip on fluid on the floor.

Labour hire

Examples in this category are:

• an agency worker falls down an unguarded hole while employed on a third party's (that is, the end user's) work site and sustains injury
• an employer who engages an agency worker fails to provide adequate supervision and training and also fails to ensure safe work practices. As a result, the worker is crushed by a reversing forklift when crossing a factory floor without designated walkways. The forklift was not fitted with reversal warning devices.

Exposure to hazardous substances

Examples in this category are:

• a worker opens an inadequately labelled container of dangerous chemicals without wearing the required protection and sustains serious burns to the face and lungs due to insufficient warnings
• a worker employed for over 15 years in a tenanted premises was found to have been exposed to high levels of asbestos in the walls and ceilings
• outflow of contaminated fumes, chemicals and dusts must be controlled. For example, a worker is employed in premises adjacent to a building where the building owner and/or the air conditioning service contractor failed to ensure that regular treatment of the water in the cooling towers was supplied. The worker contracts Legionnaires’ disease as a result.

Animal attacks

Example in this category is:

• a home owner failing to adequately restrain his dog which leaves the property via an open gate and mauls a council worker. Action can be taken against the home owner who invariably is covered under the public risk extension of their home policy.

Bullying & assaults

Employers must provide safe workplaces and protect employees from bullying and occupational violence from fellow employees. Violence occurring outside the workplace is not usually foreseeable by the employer. However, an employee should not be subjected to unreasonable behaviour from the same person or group of persons on separate occasions.

Examples in this category are:

• a supervisor abuses individual members of their team on separate occasions causing psychological harm to a number of workers who are unable to continue working.
• over the course of a month, an employee is bullied in three separate incidents: one involving his supervisor, one involving a senior manager and one involving a group of workers. As a result, the worker becomes depressed, suffers nervous anxiety and is unable to attend the employer's premises.
• a fellow worker attacks and physically assaults another worker in an argument over a personal matter not related to employment or the performance of their work. Action can be taken against the fellow worker.

Similarly, a worker is assaulted by a third party customer in a dispute over payment for supplies. Where the assailant is not a co-worker the cause of the dispute/argument can be work related.

Note: When coding the claim, Agents must code the accident type by the causation of the injury that is 'bullying' and/or 'assault' not the resultant condition, which is 'stress'.

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1.3.3.3 Third party liability

Liability for third party negligence depends on these basic principles:

• a legal entity owes a standard of care to others
• liability can be assumed through:
• acts of negligence
• deliberate and intended behaviour.

Standard of care owed

Generally, a legal entity owes a standard of care to others in the way they conduct their affairs. This applies whether they are an individual or a company. They should not expose others to a foreseeable risk of injury.

Examine circumstances

Agents should look closely at the circumstances that have actually caused the injury to determine whether deliberate and intended behaviour of a third party or the failure of a third party to discharge a standard of care has contributed to the injury.

Failure to discharge standard of care

A third party may be held liable for injuries sustained by workers if the third party has acted negligently and failed to discharge a standard of care. These circumstances allow a worker to recover damages against the third party and entitle WorkSafe to recover any compensation paid or payable.

Bullying & harassment

A third party liability can arise due to other circumstances that can include deliberate and intended behaviour such as cases involving assault, bullying and harassment by members of the public or by co-workers.

Reasonableness of standard of care

The expected standard of care varies according to circumstances. The risk must be reasonably foreseeable and the public and workers must be warned of these risks.

The standard of care must be reasonable. The test of what is reasonable is based on what the ‘reasonable person' would consider as being the appropriate level of care.

The standard of care regarded as being reasonable depend on the:

• nature of the worker's occupation
• inherent dangers involved in the occupation
• skills and experience of the worker.

The risk must be reasonably foreseeable, that is, it is possible to predict actions or precautions that would have avoided injury without requiring the benefit of hindsight.

Third party obligations

A third party is obliged to ensure that their processes or business operations are conducted with reasonable safety.

It follows that any person performing work at any other persons' business or residence must be instructed in and required to observe relevant safety procedures, instructions and warnings.

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Adequate warnings

Members of the public and/or workers must be adequately warned of various risks of which the third party should be aware.

Workers performing work under the direction and control of a third party must be:

• properly instructed how to perform the work
• adequately supervised
• made to follow any warnings or instructions
• provided with adequate training and equipment
• provided with competent and efficient co-workers
• provided with a safe place of work
• provided with regularly maintained and safe equipment that is fit for the task.

Standard of care for people invited onto premises

Owners or occupiers of premises providing entertainment, information, goods or services have a high standard of care, particularly because they are inviting people onto their premises.

The obligation to take reasonable care must be owed at the time of the accident or injury.

The injury must be directly related to third party negligence through the failure to discharge a standard of care. It must not be too remote.

Employers owe a non-delegable duty of care for their employees. This obligation includes ensuring that workers are not exposed to the likelihood of injury when working in the premises or in a worksite controlled by another party.

The employer should inspect the premises regularly and take action to remove the risk of injury. Failure to do so would be held by the courts as contributory negligence.

1.3.3.4 Contributory negligence

In claims involving contributory negligence the amount recoverable is limited to the extent of third party contribution.

The extent of the third party's contribution toward the causes of the worker's injury determines the amount recoverable from a negligent third party. The contribution of the employer, worker and third party needs to be taken into account.

The contributory negligence of the worker reduces the liability of the third party.

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