Third Party Liability

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Rural letter carriers sometime sustain injuries in the performance of their duties under circumstances which place a legal liability on a person or persons other than the United States Postal Service to pay damages. The person or persons responsible for the injury to the employee is generally referred to as a "third party". The term "person or persons other than the United States Postal Service" means someone other than the employing agency or the United States Government. Thus, a third party may be a private citizen or can even be another Federal employee, including (on rare occasions) a co-worker of the injured employee. These types of "third party" claims may include vehicle accidents, fights, falls on a customer's property, etc...

When an employee is injured as a result of a third party's action, the employee can file a claim or suit against the third party or the third party's insurance company. This claim will be for damages resulting from the injury. Damages can include medical expenses, lost wages, property damage, pain and suffering, etc...

Under the Federal Employees' Compensation Act (FECA), when an injured employee who is entitled to compensation for the injury recovers money or other property as a result of a suit or settlement against a third party, the injured employee has an obligation to refund to the United States Postal Service the compensation that has been paid (COP is excluded from the amount that must be refunded. This will be addressed further in this article).

If the injured employee recovers more than what has been paid in compensation and medical expenses, he or she is said to have a surplus. The employees entitlement to future compensation payable for the same injury will be a credit toward the surplus and no additional compensation will be paid until the surplus is absorbed.

The United States Postal Service has an interest in recovering compensation when one of its workers suffers a job-related injury that was caused by a third party.

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Identifying Third Party Liability
Hiring your own Attorney
Representing yourself
USPS Pursues Claim

Identifying Third Party Liability

The responsibility for identifying the potential for third party liability in a given case lies jointly with the OWCP claims examiner and the Postal Service's Injury Compensation Specialist.

If the potential third party liability is not recognized in a case, or not recognized soon enough, the matter may never be pursued. All states have statutes of limitations for personal injury, wrongful death, medical malpractice, and product liability. An injured employee who does not file a claim or suit against the third party within the applicable statutory time limitation cannot recover damages that result from the injury. Money which the United States may otherwise have recovered would be lost.

The word "potential" in the context of identifying third party liability is very significant. The claims examiner does not need to be positive that a third party has legal liability for an injury. Instead, they only need to recognize cases in which this kind of liability is a possibility.

In many cases the potential for a third party claim is fairly evident from the circumstances of the injury. The following situations clearly indicate potential third party liability:

• A letter carrier is attacked by an unleashed dog owned by the customer to whom the carrier is delivering the mail;
• A letter carrier trips and falls on a broken porch step at a home to which the carrier is delivering mail;
• A letter carrier in his/her vehicle is "rear-ended" by another automobile while delivering the route;

In other cases, such as malpractice and product liability, the potential is not so easy to recognize:

• A letter carrier sustains an arm injury when a piece of equipment malfunctions;
• A letter carrier suffers an injury to his/her hands while handling a solvent or cleaning supply sample.
• A letter carrier who sustained a job-related injury obtains treatment from a physician and that treatment (or lack of correct and proper treatment) worsens the injury or causes another injury.

In many cases, especially those involving medical malpractice and product liability, the information available at the time the injury is first reported may not permit a determination as to whether there is in fact third party liability. Many factual and legal issues will require resolution. This is why such cases as medical malpractice and product liability are handled by the Department of Labor's Office of the Solicitor.

Some third party claims may be further complicated by "contributory negligence". Sometimes a third party is responsible for a claimant's injury, but an element of responsibility might also be attributable to the claimant. For example, a 300 pound letter carrier falls and injures himself while delivering mail because the homeowner's steps collapsed. Although the homeowner is responsible for maintaining the steps in good condition, an argument could be made that holding a 300 pound person is not normal wear for the steps. In cases such as this, the third party is not absolved of responsibility for the injury, but the degree of responsibility can be acknowledged as less than complete by settling for a smaller sum.

The United States Postal Service may, in certain cases, administratively pursue the collection of damages from the third party responsible for the injury to a rural letter carrier. Such pursuit is limited to cases of traumatic injury, except those traumatic injury cases which fall within one or more of the following categories:

• Where the traumatic injury results in the death of the employee;
• Where the injury occurred outside of the US or Canada;
• Where the injury occurred when the employee was a passenger on a common carrier's conveyance (train, bus, airplane, etc...); Where injuries are sustained by more than one employee in the same incident (group injuries).

The USPS will prepare and release correspondence to the appropriate parties, and will pursue the collection of damages from the responsible third party by administrative means. This may include obtaining the employee's full assignment to the USPS of any right of action the employee may have to enforce the liability, provided that such assignment is voluntary on the part of the employee.

It is the responsibility of the OWCP claims examiner to identify all potential third party liability situations, including those cases which are to be administratively pursued by the USPS. If there is information in the case file that indicates the USPS has also identified the case as having third party potential the claims examiner will simply monitor progress of the case. However, if there is no indication that appropriate action is being taken by the employee or by the USPS the claims examiner will release a letter to the USPS bringing the case to their attention and asking what actions have been taken with regard to the third party aspect of the case.

The purpose of pursuing a third party claim is to recover 100% of actual and, in some serious cases, projected expenses and to secure a settlement that compensates for inconvenience, pain and suffering, etc... The USPS will always keep OWCP advised of all third party actions, particularly when settlement discussions commence. The injured worker's authorized representative should always call OWCP to get an update on the total disbursements before agreeing to any settlement.

If, in reviewing the CA-1 form, the Postal Service sees the potential for third party liability, this will be annotated on the back of the CA-1. The USPS will then send a letter to the employee informing him or her that:

1. In cases involving potential third party liability employees are encouraged to seek recovery from the responsible party;
2. If damages are recovered, the US Government must be reimbursed for any payments made on the employees' behalf;
3. The employee is guaranteed a minimum of 20% of the net recovery as well as any surplus remaining after the disbursements have been made;
4. Employees who refuse to pursue third party action may be denied compensation by OWCP

The USPS will explain to the injured worker how he or she can collect damages. The choices are:

• To hire an outside attorney to sue the third party;
• To try to settle with the third party directly;
• To ask the agency to pursue in his/her stead; To refuse to pursue ( in which case the employee will be informed that this may result in benefits being denied.)

Note: OWCP may sometimes agree that third party liability should not be pursued. For example, it might be bad publicity for an agency to sue an elderly person on a fixed income for failing to clear an icy sidewalk on which an employee fell. Also, where the injury is minor (total compensation do not, or are not expected to exceed $1000) OWCP may close the case if the claimant does not respond to OWCP's request for information or if the claimant indicates he or she is not asserting third party liability or retaining an attorney. In these cases the potential returns do not justify the administrative costs to pursue the action.

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Hiring your own Attorney

If an employee hires an outside attorney to pursue the third party suit, the USPS will probably suggest that the employee hire the attorney on a contingency fee basis. This means that the attorney takes a percentage of the amount recovered, rather than a fee paid "up front". Otherwise, if the attorney does not recover for the employee, the employee may be stuck with attorney's fees that he or she will have to pay out of pocket. Usual percentages range from 30% to 40%.

• After the claimant has chosen an attorney, the USPS will send OWCP the third party form that identifies the claimant's choice and includes the name of the attorney.
• OWCP will help to make sure the agency gives the attorney correspondence and documents establishing liability and current wage loss information and medical expenses making up the lien.
• When the attorney settles the case, the USPS will obtain the Statement of Recovery and settlement check from the attorney.

The employee is always guaranteed at least 1/5 (20%) of the gross recovery after the attorney's fee is paid and before offsets are taken for OWCP benefits paid.

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Representing yourself

If the employee settles directly, he or she is, in effect, acting as his or her own attorney.

• The USPS will give the employee all documents normally given to an attorney.
• The employee will contact the third party and settle the claim.
• The employee makes the settlement and sends the disbursement check to OWCP. OWCP then credits the agency's account.
• Any surplus, after the lien is paid, goes to the employee. However, this amount must be used by the employee for expenses incurred for the same injury before the employee is eligible to collect additional compensation from OWCP.

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USPS Pursues Claim

If the USPS pursues the third party claim for its employee, the employee assigns his or her case to the agency. In such cases the USPS, in effect, acts as the injured worker's attorney. The advantage to the employee is that he or she pays no attorney fees. In this situation:

• The claimant must reach maximum medical recovery before the agency attempts to settle the claim.
• The agency handles only routine cases (e.g., less than $5000 and a week off work). If the case starts off simply but then becomes complicated, the employee may revoke assignment to the agency and hire an attorney.
• Once the employee assigns the agency to handle the claim, he or she may not negotiate the settlement figure that the agency arrives at. On the other hand, the agency may choose to discuss the projected settlement figure with the employee. Then, the employee has the opportunity to revoke the assignment and hire an attorney to pursue it himself or herself.

If the agency pursues the claim on behalf of the injured worker, the compensation specialist for the Postal Service will:

1. Contact the responsible third party explaining the accident and asking that the responsible party, the insurance carrier, or the third party's attorney contact the workers' compensation office to discuss the case.
2. Send OWCP a letter requesting an itemized statement of disbursements made on behalf of the claim. (The employee or doctor may have sent bills directly to OWCP; these would not be in the agency's files.)
3. Write to the employee's supervisor stating that the USPS anticipates negotiating a settlement of the claim regarding his or her employee. In that letter, the compensation specialist will list expenses incurred as a result of the injury. The supervisor will be instructed to ask the employee to identify any additional expenses that should be included in the settlement. (Sometimes the employee has baby-sitting charges or extra transportation costs for a light duty assignment following the injury.)
4. Figure the lien by adding up all costs for: Compensation payments, medical bills and related expenses, and any other employee out-of-pocket expenses.
5. Prepare a projected settlement figure.
6. Inform the employee of the dollar amount of the proposed settlement.
7. Make an offer in writing to the third party's claims adjuster.
8. Obtain the release form, signed by the employee.
9. Send the release form to the insurance company.
10. Collect and disburse the money.
11. Send a letter to the employee informing him or her of the settlement figure.
12. Complete the Statement of Recover and forward it to OWCP. OWCP must have this before it closes the case.

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