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Tuesday, July 5, 2011

Employers Prohibited From Seeking Reimbursement From a Public Entity

A New Jersey appeals court has held that an employer or insurance carrier is prohibited from seeking reimbursement from a public entity resulting from a work related claim. Only a direct action may be brought by an employee against a public entity.
"Relying on Travelers, supra, 169 N.J.Super. at 415, Judge Casale held that where, as here, a public entity is the third-party tortfeasor, the Tort Claims Act (TCA), N.J.S.A. 59:9-2(e), bars subrogation by the employer or its worker's compensation carrier. That section provides: "No insurer or other person shall be entitled to bring an action under a subrogation provision in an insurance contract against a public entity or public employee." Ibid.
"It is clear that N.J.S.A. 34:15- 40 not only permits subrogation recovery from the employee, but would allow a lawsuit directly against the third-party tortfeasor. N.J.S.A. 34:15-40(f). However, in enacting the TCA, N.J.S.A. 59:9-2(e), the Legislature intended that the cost of worker's compensation payments should not be shifted to a public entity that happened to be a third-party tortfeasor. Instead, those costs were to be absorbed by the worker's compensation insurer. Travelers, supra, 169 N.J.Super. at 415.
Thomas v The City of East Orange,  Docket No. L-6929-09, 2011 WL 2582550 (N.J.Super.A.D.) Decided July 1, 2011.

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