Workers’ Compensation and Rehabilitation Act 2003

This section applies to—

an injury sustained by a worker in circumstances creating—

an entitlement to compensation; and

a legal liability in the worker’s employer, or other person, to pay damages for the injury, independently of this Act; and

damages that an employer is not indemnified against under this Act.

An amount paid as compensation to a person for an injury, to which there is an entitlement to payment of damages at a time or for a period before the person becomes entitled to payment of damages by an employer or another person, is a first charge on any amount of damages recovered by the person to the extent of the amount paid as compensation to the person.

Subsection (2) applies to compensation paid under chapter 4A only if the damages include treatment, care and support damages.

An employer or other person from whom the damages are recoverable must pay the insurer the amount of the first charge or, if the damages are not more than the amount of the first charge, the whole of the damages.

Payment to the insurer under subsection (4), to the extent of the payment, satisfies the liability of the employer or other person for payment of the damages.

A person can not settle, for a sum less than the amount that is a first charge on damages under subsection (2), a claim for damages had by the person independently of this Act for an injury to which there is an entitlement to payment of damages without the insurer’s written consent.

If, without the insurer’s consent, a settlement mentioned in subsection (6) is made, then to the extent that the damages recovered are insufficient to meet all payments due to the insurer under this section—

the insurer is entitled to be indemnified by the employer or other person who is required by the settlement to pay the damages; and

to that end, the insurer is subrogated to the rights of the person who has sought the damages, as if the settlement had not been made.

If a person who has received compensation has not recovered, or taken proceedings to recover, damages for the injury from another person, other than the worker’s employer—

the insurer is entitled to be indemnified for the amount of the compensation by the other person to the extent of that person’s liability for the damages, so far as the amount of damages payable for the injury by that person extends; and

to that end, the insurer is subrogated to the rights of the person for the injury.

Payment made as indemnity under subsection (8), to the extent of the payment, satisfies the person’s liability on a judgment for damages for the injury.

In addition to all rights of action had by the insurer to give effect to its right to indemnity under this section, all questions about the right and the amount of the indemnity may, in default of agreement, be decided by an industrial magistrate if all persons affected by the indemnity consent.

In this section—