Workers Compensation vs. Personal Injury

Posted on Legal


If I was injured on the job, should I file a workers compensation case or a personal injury case?

When an employee is injured on the job, the remedies available to them include workers’ compensation and a personal injury lawsuit, but many people do not understand the difference between the two. Generally, a worker who was injured on the job will file a workers’ compensation case, although there are times when it might be in their best interest to litigate the matter. It is important to note that workers’ compensation was established to protect both the employer and the employee, and to eliminate the need for litigation.

Overview (Jurisdiction and Definition)

Workers’ Compensation
Workers compensation is an insurance policy administered by the workers’ compensation boards of individual states. There is also federal workers’ compensation insurance for federal employees that is administered by the federal government. Under workers’ compensation law, benefits are available to a worker who is hurt on the job, and no proof of fault needs to be made for benefits to be paid. All that needs to be established is that the injury occurred on the job and is connected somehow with the work the employee performed.

Under workers’ compensation, an injured employee receives non-taxable income equivalent to about two-thirds of their average wage on a weekly or bi-weekly basis. They also receive medical care for their injury, compensation for a permanent injury, and reimbursement for any necessary job retraining. Benefits are also available to survivors of those who are killed on the job. In exchange for these benefits, the employee gives up the right to sue the employer for personal injury, except in very specific circumstances.

Personal Injury
Personal injury lawsuits are not limited to any specific class of people. Anyone who is injured due to the negligence of another may bring a personal injury lawsuit, but in order to recover damages, the injured party must prove that another person was at fault, or negligent, and caused his injury. The injured party, or plaintiff, must also show proof of the amount of damages that resulted from the injury, and requests payment from the defendant to “make him whole again.” These damages are compensatory, and usually include property damage, medical expenses, lost wages, and loss of future earning capacity. If applicable, plaintiffs may also demand damages for pain and suffering resulting from the injury. There are many defenses, or arguments, available to the defendant that may protect him from having to pay damages. These include contributory negligence, comparative negligence, and assumption of the risk.

Who is Covered?
State workers’ compensation laws cover most employees, although some classes may be excluded, including independent contractors, business owners, casual workers, volunteers, employees who work in private homes, farmers and farmhands, maritime and railroad employees, and those who work for employers with fewer than three to five employees. Federal workers are covered by federal workers’ compensation insurance, not their state’s plan. There is no specific class of people covered under personal injury law; however, those who receive workers compensation benefits are usually (but not always) barred from bringing a personal injury lawsuit against their employer.

Under state tort laws, individuals are owed a duty of care by others, and failure to exercise the care — that a reasonably prudent person would exercise in like-circumstances — constitutes negligence, an area of tort law that involves harm caused by carelessness. Anyone who is injured because of the negligent actions or inactions of a third party may file a personal injury suit in the state court of the county where the injury occurred, or where the parties to the incident are located.

Key Areas of Overlap
The purpose of both workers’ compensation and personal injury lawsuits is to provide compensation to injured individuals, and although there are differences between the two, there are also areas of overlap.

Workers’ compensation can provide monetary awards to those injured on the job without litigation, but there are some instances when injured workers may be able to bring a personal injury case. These include:

• Injuries involving a defective product, in which a products liability lawsuit may be brought against the product’s manufacturer
• Injuries involving a toxic substance, in which a toxic tort lawsuit may be brought against the manufacturer of the toxic substance
• Injuries occurring as a result of an employer’s intentional or egregious conduct
• Injuries occurring in a workplace in which the employer is not required to carry workers’ compensation insurance; or is required but has failed to  do so
• Injuries intentionally caused by an employer or fellow employee
• Injuries caused by the negligence of a third party, someone other than an employer or a co-worker

Although workers’ compensation and a personal injury settlement can both provide money and benefits to an injured worker, temporary disability and permanent disability payments available through workers’ compensation are usually relatively small and don’t compensate the worker for damages like pain and suffering. Workers’ compensation also does not provide punitive damages to punish an employer for poor safety controls or dangerous conditions. It is important for injured employees to understand their rights to initiate a personal injury lawsuit outside of the workers’ compensation system.

Where the Injury Occurs
While workers’ compensation laws cover workers who are injured on the job, if a worker is injured outside the course and scope of his employment, he is not usually afforded coverage under workers’ compensation. This does not mean, however, that he is only covered for injuries occurring at his principal place of work. Employees who are required by their employers to perform work-related activities in other locations, such as construction workers and road maintenance crews, are usually covered by workers’ compensation, as long as the injury occurred while they were engaged in duties related to their employment. Commuting to and from a work site and lunch breaks may be examples of non-work related duties.

Personal injuries can take the form of automobile accidents, slip and falls, dog bites, and injuries suffered in unsafe or dangerous workplaces. Personal injury lawsuits may be brought by any injured person, regardless of where the injury occurred. The key is not where the injury occurred, but whether or not it was due to the negligence of a third party.

Fault and Negligence
Workers’ compensation benefits are typically paid without determining who is at fault for the employee’s injury, and fault is almost never an issue. It is only when an employee’s injury is due to an intentional act of the employer or another employee or the employer violated regulations regarding safety in the workplace that fault comes into play.

In a personal injury matter, fault plays a major role in determining liability. Not only must fault be proven, a third party’s fault must have also been a cause of the plaintiff’s injury and resulting damages. If fault cannot be established, no liability can be proven, even in the case of a serious injury. Similarly, if the plaintiff suffered no damages, there is nothing to base an award on, even if another party was at fault.

Fees and Award Comparison
Costs and Fees
State workers’ compensation boards allow attorneys to collect a fee based upon a statutory fixed percentage, no more than 25 percent in most states. Attorneys are also allowed to recover the costs associated with handling the case, which may include the charges related to required medical exams, depositions, and administrative costs for copying, postage, and telephone calls. Workers’ compensation typically pays the medical costs associated with the injury directly to the medical providers.

Personal injury attorneys usually require clients to sign a retainer agreement that outlines the attorney fees and costs that the client will be required to pay when the case is finalized, either through settlement or litigation. Many personal injury attorneys receive one-third of the award if the case settles before it is filed in court, and more if it goes to trial. Some attorneys negotiate with medical providers and handle the payment of all the client’s injury-related medical bills for them, while others disburse the award, after all legal fees and costs are deducted, directly to the client, who is expected to pay off his own medical bills.

Although workers’ compensation provides monetary as well as other benefits to an injured worker, the awards can be quite low compared to those given in a personal injury lawsuit, and workers’ compensation does not cover damages such as pain and suffering. Most states do not have caps on compensation in personal injury cases, and awards may reach hundreds of thousands or even millions of dollars, but there are no guarantees. A plaintiff’s recovery is based upon whether or not negligence can be proven, the amount and nature of the damages, and if the matter goes to trial, the discretion of the jury.

Filing Process and Procedure
Most injured workers receiveworkers’ compensation benefits in a timely manner — often within days of the injury — but some with more serious injuries or a less-cooperative employer may find it necessary to file the claim with their state’s workers’ compensation board. The filing of workers’ compensation case can take place with or without the help of an attorney.

In most states, settlement conferences are held before a workers’ compensation case is scheduled for a hearing. If a settlement cannot be reached during the conference, the case will be set for hearing before a workers’ compensation judge. Workers’ compensation hearings are usually less formal and rules of evidence more lenient than in a court trial. At the hearing, both parties present evidence through witnesses and documents, and the judge will make a ruling that is considered final unless a timely appeal is filed.

Personal injury cases may be commenced immediately after an injury or any time up until the statute of limitations has expired; this timeframe varies from state to state. Because of the sometimes complex nature of the case and the negotiation skills that are often required in a personal injury case, the assistance of an attorney is usually necessary. If the matter cannot be settled out of court, the plaintiff’s attorney will file paperwork that commences the lawsuit. Personal injury lawsuits typically are not resolved quickly, and it is not uncommon for a case to take several years to settle. This is partly due to the fact that some injuries require extensive medical treatment before the client is considered to be at “maximum medical improvement,” a time when past, present, and future damages can be calculated.

During the litigation process, information is exchanged between the parties through a formal process called Discovery. If the dispute still cannot be resolved, it will be set for trial, usually in front of a jury. At the trial, the jury hears the evidence from both parties, reaches a verdict, and also decides on the amount and type of damages, if any, that will be awarded to the plaintiff. The decision of the jury is also considered final, although either side has the right to file a timely appeal to a higher court.

Litigation is very expensive, stressful, and the outcome can be extremely unpredictable. Because negligence must not be proven, it is generally far easier to win a workers’ compensation case than it is to prevail in a personal injury case.

While it is usually advantageous to settle either a workers’ compensation matter or a personal injury case out of court, there are times when this is not possible, and the dispute is either set for hearing or trial. The likelihood of whether or not these cases will be litigated or not depends on a variety of factors, including the nature and seriousness of the injury, the relative fault of the parties, and the motivation on the part of either party to bring the matter to a close.

Most workers who are injured on the job are covered under their employer’s workers’ compensation insurance. They do not need to prove negligence and will most likely file a claim with the workers’ compensation board in their state, or the federal government if they’re a federal employee. In exchange for monetary benefits, workers’ compensation law requires injured employees to give up the right to bring a fault-based personal injury lawsuit against their employer, although under very specific circumstances they might still be able to file such a claim. While the payoff can be much higher in a personal injury case than in workers’ compensation, personal injury cases typically take much longer to finalize, and because negligence must be proven, they are usually much harder to win.