Ark. Code Ann. § 11-9-410 (2026)

Research References

Ark. L. Notes.

Brill, Equity and the Restitutionary Remedies: Constructive Trust, Equitable Lien, and Subrogation, 1992 Ark. L. Notes 1.

Ark. L. Rev.

Workmen's Compensation-Benefit Award as Release of Third-Party Tortfeasor, 4 Ark. L. Rev. 252, 253, 254.

Rights and Liabilities of Principals in the Insurance Relationship — A Partial Survey, 5 Ark. L. Rev. 24.

Workmen's Compensation — Contribution and Indemnity — Employer's Liability to Third Party Tortfeasor, 8 Ark. L. Rev. 512.

Workmen's Compensation — Aggravation of Compensable Injury — Resulting from Medical Treatment, 14 Ark. L. Rev. 117.

Insurance — Effect of Workmen's Compensation on Uninsured Motorist Coverage, 23 Ark. L. Rev. 498.

Uninsured Motorist Insurance Offset for Workmen's Compensation Benefits, 26 Ark. L. Rev. 570.

Comment, Is the Made-Whole Requirement More than We Bargained For?: From Franklin to Tallant — a Call to Reexamine the Made-Whole Doctrine in Arkansas, 60 Ark. L. Rev. 295.

Flavio Rios Guerrero v. OK Foods, Inc.: Advocating for a Broader Intentional-Tort Exception to the Workers' Compensation Exclusive-Remedy Doctrine, 61 Ark. L. Rev. 133.

U. Ark. Little Rock L.J.

Arkansas Law Survey, Dobson, Workers' Compensation, 8 U. Ark. Little Rock L.J. 225.

Notes, Workers' Compensation — Supervisory Employees Are Immune From Tort Actions, 8 U. Ark. Little Rock L.J. 523.

Survey—Workers' Compensation, 11 U. Ark. Little Rock L.J. 269.

U. Ark. Little Rock. L. Rev.

Annual Survey of Case Law, Employment Law, 28 U. Ark. Little Rock L. Rev. 732.

Case Notes

In General.

This chapter does not give or create a cause of action against a third party causing a compensable injury to the employee but only makes it plain that the common law remedy as the employee already had against tortfeasors prior to the enactment of the chapter was fully preserved and left unchanged when the tortfeasor is other than the employer. Neal v. Oliver, 246 Ark. 377, 438 S.W.2d 313 (1969).

This section provides that, even though an employee draws worker's compensation benefits, he is not precluded from making a separate claim or maintaining a separate cause of action against a third party causing the injuries. Simpson v. Liberty Mut. Ins. Co., 816 F. Supp. 1348 (W.D. Ark. 1993).

This section provides two methods for pursuing a third-party claim or cause of action: the employee may pursue the claim and make a recovery or, if he chooses not to do so, the employer or carrier may do so. In either event, the employee is to receive at least one third of the amount received, calculated after payment of costs of collection, and the employer or carrier, if there is enough remaining, is to be reimbursed for the workers' compensation benefits paid. Simpson v. Liberty Mut. Ins. Co., 816 F. Supp. 1348 (W.D. Ark. 1993).

This section creates one cause of action, but two separate claims, one belonging to the employee and the other belonging to the employer or insurance carrier for the employer. Simpson v. Liberty Mut. Ins. Co., 816 F. Supp. 1348 (W.D. Ark. 1993).

Where a third-party tort action was filed against a company based on the allegation that claimant was a special employee of the company, in granting a writ of prohibition the Court implicitly held that the special employee issue was to be decided by the Arkansas Workers' Compensation Commission as it had exclusive, original jurisdiction to determine the applicability of the Arkansas Workers' Compensation Act. Nucor Corp. v. Rhine, 366 Ark. 550, 237 S.W.3d 52 (2006).

Construction.

This section is vague and ambiguous and, therefore, the courts will consider the decisions of other jurisdictions to determine its real meaning. Boulden v. Herring, 126 F. Supp. 885 (W.D. Ark. 1954), aff'd, 227 F.2d 303 (8th Cir. Ark. 1955).

Subdivision (a)(1) of this section does not grant the employer and carrier any right of recovery but, instead, only provides a means for securing the right given by other sections of this section. Simpson v. Liberty Mut. Ins. Co., 816 F. Supp. 1348 (W.D. Ark. 1993).

When subdivision (a)(1) of this section gives a carrier the right to intervene, the carrier may intervene as a matter of right under ARCP 24(a). Carton v. Missouri Pac. R.R., 315 Ark. 5, 865 S.W.2d 635 (1993).

Applicability.

This section does not apply to suits brought under the Wrongful Death Act, § 16-62-102. Maryland Cas. Co. v. Rowe, 256 Ark. 221, 506 S.W.2d 569 (1974).

Acceptance of workers' compensation payments pursuant to this chapter does not mean that Arkansas automatically has the most significant relationship in determining the procedures of third-party tort settlement; acceptance of workers' compensation payments from a state does not mean that the parties made an election to accept the procedures of third-party settlement pursuant to that state's law. Simpson v. Liberty Mut. Ins. Co., 28 F.3d 763 (8th Cir. 1994).

Compensation and Tort Claims Separate.

The recovery of a claim for compensation does not affect the employee's right to maintain a tort action against any third person responsible for the injury whether the act of the third person be willful or merely negligent. Heskett v. Fisher Laundry & Cleaners Co., 217 Ark. 350, 230 S.W.2d 28 (1950); Baldwin Co. v. Maner, 224 Ark. 348, 273 S.W.2d 28 (1954), superseded by statute as stated in, Stapleton v. M.D. Limbaugh Constr. Co., 333 Ark. 381, 969 S.W.2d 648 (1998).

Where administrator of deceased worker had cause of action for wrongful death against third-party tortfeasor, his cause of action and that of compensation carrier of employer for reimbursement for death benefits paid were separate causes. Winfrey & Carlile v. Nickles, 223 Ark. 894, 270 S.W.2d 923 (1954).

Employee who had received workers' compensation benefits in another state was not precluded against third party responsible for accident in Arkansas even though the other state's workers' compensation law provided that employee would be conclusively presumed to have elected to accept its provisions unless prior to the accident he had filed with compensation commission a written notice that he elected to reject the other state's law. Carroll v. Lanza, 349 U.S. 408, 75 S. Ct. 804 (1955).

Fact that person has been compensated to some extent through this chapter would not benefit defendant so as to reduce the damages in the tort action. Swindle v. Thornton, 229 Ark. 437, 316 S.W.2d 202 (1958).

The making of a claim for compensation does not affect the right of the employee or his dependents to maintain an action against a fellow employee whose negligence caused the accident. King v. Cardin, 229 Ark. 929, 319 S.W.2d 214 (1959).

Workers' Compensation Commission and trial court erred in refusing to consider claim on ground that the accident happened in another state and that state's law was controlling as to allowance of benefits, as recovery in tort from third party for such injury does not bar recovery of workers' compensation in Arkansas, although law of other state forbids such recovery. Gentry v. Jett, 235 Ark. 20, 356 S.W.2d 736 (1962).

Plaintiff's recovery from the insurer was not subject to reduction by the amount of workers' compensation paid plaintiff by his employer, but the employer was entitled to the amount so paid by him out of plaintiff's recovery. Jones v. Morrison, 284 F. Supp. 1016 (W.D. Ark. 1968).

Where employee voluntarily refunded compensation amounts prior to bringing personal injury claim, the refunded amounts belonged to the employee and not to the carrier and employee was entitled to them even though period of limitations for compensation claims had expired. Bryan v. Ford, Bacon & Davis, 246 Ark. 327, 438 S.W.2d 472 (1969).

Under this section, the receipt by plaintiff of workers' compensation did not affect her right to recover full compensation from the third-party defendant. Rhoads v. Service Machine Co., 329 F. Supp. 367 (E.D. Ark. 1971).

The statement in Winfrey & Carlile v. Nickles, 223 Ark. 894, 270 S.W.2d 923 (1954), that this section recognizes separate causes of action in the compensation carrier, should not be taken to mean that the single cause of action against the tortfeasor might be split, for that statement relates to the separtate rights of the beneficiary and carrier to institute the action against the tortfeasor. Amos v. Stroud, 252 Ark. 1100, 482 S.W.2d 592 (1972).

Costs of Collection.

Subdivision (a)(2)(A) does not require a compensation carrier in all instances to participate in the payment of reasonable costs of collection of a personal injury claim, including attorney's fees; rather, this section provides only that reasonable costs of collection shall first be deducted from the gross amount received, before the net amount is allocated between the claimant and subrogee. The statute clearly does not provide for splitting of the gross sum in order to make a pro rata allocation of the costs of collection from both the claimant and the insurance carrier. Public Employee Claims Div. v. Chitwood, 324 Ark. 30, 918 S.W.2d 163 (1996).

—In General.

The existence of an alleged contract between employee and employer's insurance carrier calling for a contribution by the carrier, as part of the costs of collection of one third of the amount the carrier was entitled to receive in the settlement was a matter over which commission had no jurisdiction. Maxcy v. John F. Beasley Constr. Co., 228 Ark. 253, 306 S.W.2d 849 (1957).

—Attorney's Fees.

In a suit by an employee against a third-party tortfeasor, the employee's attorney's fees are to be deducted from the total recovered before an employer's insurer recovers for past and future workers' compensation payments, even though the insurer admitted liability where there is a contested case. Boulden v. Herring, 126 F. Supp. 885 (W.D. Ark. 1954), aff'd, 227 F.2d 303 (8th Cir. Ark. 1955).

Attorney for administrator of deceased worker, where successful in suit against third-party tortfeasor, was not only entitled to contingent fee on the one-third share of administrator but on the two-thirds share of the compensation carrier who intervened in action in order to claim its statutory share of proceeds as reimbursement of death benefits paid. Winfrey & Carlile v. Nickles, 223 Ark. 894, 270 S.W.2d 923 (1954).

Contingent fee contract between administrator of deceased worker's estate and attorney hired by him to bring wrongful death action was not binding upon compensation carrier who had intervened to claim share of recovery as reimbursement for death benefits paid. Winfrey & Carlile v. Nickles, 223 Ark. 894, 270 S.W.2d 923 (1954).

It is for the court and not the commission to determine reasonable compensation for legal services performed in suit against third-party tortfeasor although court, by agreement of parties, referred question of distribution of recovered funds to commission for determination. Winfrey & Carlile v. Nickles, 223 Ark. 894, 270 S.W.2d 923 (1954).

In action against third-party tortfeasor, beneficiary would be required to pay his attorney out of his share of the recovery in accordance with his contract with the attorney and subrogated insurance carrier would be required to pay its attorneys out of their share of the recovery in accordance with its contract. Saint Paul-Mercury Indem. Co. v. Lanza, 131 F. Supp. 684 (W.D. Ark. 1955), aff'd, 232 F.2d 747 (8th Cir. Ark. 1956).

Attorney's fees are not part of the “costs of collection” which are to be deducted before beneficiary's share of recovery against third-party tortfeasor is paid over. Saint Paul-Mercury Indem. Co. v. Lanza, 131 F. Supp. 684 (W.D. Ark. 1955), aff'd, 232 F.2d 747 (8th Cir. Ark. 1956).

In action against third-party tortfeasor, beneficiary had no power to reject services of attorneys of insurance carrier who was subrogated to rights of beneficiary to the extent of benefits paid by the carrier and fees of the attorneys were not deductible from beneficiary's portion of recovery in absence of express or implied contract between the attorneys and beneficiary. Saint Paul-Mercury Indem. Co. v. Lanza, 131 F. Supp. 684 (W.D. Ark. 1955), aff'd, 232 F.2d 747 (8th Cir. Ark. 1956).

Where employee and third party effected voluntary settlement without trial of claim arising out of injury to employee occasioned by act of third party, Workers' Compensation Commission had the right to approve allowance of employee's attorney's fee and other reasonable costs of collection. Maxcy v. John F. Beasley Constr. Co., 228 Ark. 253, 306 S.W.2d 849 (1957).

Employee was entitled to have the fee of his attorney deducted from the recovery as expense of collection before computing the carrier's lien on two-thirds of the recovery. Phillips v. Morton Frozen Foods, 313 F. Supp. 228 (E.D. Ark. 1970).

Where the employer employed its own attorney to pursue the estate of the third-party tortfeasor, the trial court did not commit error in refusing to allow attorney fees for the employee's attorney as costs of collection of the third-party claim under this section; the court should simply apportion the recovery, leaving each to pay his or her own attorney. Orintas v. Meadows, 17 Ark. App. 214, 706 S.W.2d 199 (1986).

Because attorney's contingency fee and costs were initially deducted from the full amount of the third-party judgment before either the injured employee or the workers' compensation insurance carrier were distributed their respective statutory awards under subdivision (a)(2), the insurance carrier effectively paid its proportionate share of attorney's fees in the employee's third-party action, and no additional attorney's fee was provided by law. Continental Cas. Co. v. Sharp, 312 Ark. 286, 849 S.W.2d 481 (1993).

Whether or not the cost of collection includes the fee for the employee's attorney on the entire settlement or recovery must be judged on the facts of each case and depends on whether or not the workers' compensation carrier has reached an agreement with the employee's attorney to represent its interest in the third-party action, whether the carrier has had its own attorney participate in the third-party action, or whether the carrier has sat back and allowed the employee's attorney to do all the work and either settle the case or proceed to trial, waiting until a sum is recovered by the employee's attorney before stepping in to take its subrogation amount without any compensation to the attorney responsible for the recovery. Hatten v. Little Rock Dodge & Chrysler Ins. Corp., 47 Ark. App. 147, 886 S.W.2d 891 (1994).

Employer's or Carrier's Share of Recovery.

This section does not really give the employer or carrier two-thirds of the total net proceeds recovered; instead, it only gives them what they have paid, but under no circumstances shall they receive more than two-thirds of the net recovery irrespective of whether that fully reimburses them or not. Simpson v. Liberty Mut. Ins. Co., 816 F. Supp. 1348 (W.D. Ark. 1993).

Although the employee may “settle around” the insurance carrier by splitting off and putatively settling only his cause of action, he may not settle and get paid for both of the claims without expecting to reimburse the carrier for the portion of the settlement belonging to it. Simpson v. Liberty Mut. Ins. Co., 816 F. Supp. 1348 (W.D. Ark. 1993).

Where claimant failed to institute judicial proceedings prior to entering a settlement agreement with a third party, respondent compensation carrier was denied their statutory right to reasonable notice and an opportunity to intervene in an action in court and was, therefore, entitled to credit to the extent of the lien provided for in subdivision (a)(1). Wentworth v. Sparks Regional Medical Ctr., 58 Ark. App. 242, 950 S.W.2d 221 (1997).

Employer was not entitled to a lien or credit for the amounts it paid or would have to pay due to the claimant's injury that occurred within his scope of employment and involved the third party; claimant was not “make whole” by the settlement with the third party as is required before a lien or credit will be permitted. Phillip Morris USA v. James, 79 Ark. App. 72, 83 S.W.3d 441 (2002).

Immunity.

Arkansas Workers' Compensation Commission erred in concluding that it had jurisdiction over an employee's tort claims against a corporation and its owner, and in deciding that the corporation and owner were immune under § 11-9-105(a) because there was no employment relationship between the employee and the corporation and owner. Johnson v. Ark. Steel Erectors, 2009 Ark. App. 755, 350 S.W.3d 801 (2009).

Indemnity.

In the absence of a contract for indemnity running in favor of the third party, this section controls and negligent third-party tortfeasor is not entitled to indemnity or contribution from a negligent employer where their concurrent negligence has produced the injury or death of the employee. Dulin v. Circle F Indus., Inc., 558 F.2d 456 (8th Cir. 1977).

Even in the absence of an express contract for indemnity, a third party will have indemnity from a negligent employer where the liability that has been imposed upon the third party is purely vicarious and without fault on his part. Dulin v. Circle F Indus., Inc., 558 F.2d 456 (8th Cir. 1977).

Where there is no contract at all, much less an express contract of indemnity, the parties are nothing more than joint tortfeasors, and the employer is immune from any claim of contribution or indemnity. Elk Corp. of Ark. v. Builders Transport, Inc., 862 F.2d 663 (8th Cir. 1988).

Intervention.

Neither the employer nor its insurance carrier is admitting liability when it intervenes in a third-party action under this section. By intervening, they are merely preserving their right to a lien of two-thirds of the proceeds paid to the employee-claimant as a credit against their compensation exposure. Jackson Cookie Co. v. Fausett, 17 Ark. App. 76, 703 S.W.2d 468 (1986).

Where the employee has made a claim under this chapter and the employer or carrier has had reasonable notice and an opportunity to join in a third-party action, the employer and its carrier must intervene in a third-party action in order to have a right to a credit, whether or not the liability of the employer or the carrier has been determined. Jackson Cookie Co. v. Fausett, 17 Ark. App. 76, 703 S.W.2d 468 (1986).

Employer had an unconditional right to intervene in its injured employees' suit against a company the employees were working for as independent contractors, and it was error for the trial court to have denied the employer that right where the right to intervene to protect subrogation rights did not require the default judgment against the employer to have been set aside; however, although subdivision (a)(1)(A) of this section entitled the employer to reasonable notice to join in the action to protect only its subrogation right, it did not entitle the employer to reasonable notice to join in the action to protect its interest under the indemnification and hold harmless agreement. Nucor Corp. v. Kilman, 358 Ark. 107, 186 S.W.3d 720 (2004).

Joinder.

Where workers' compensation insurance carrier filed suit pursuant to this section against a third-party tortfeasor without joining the workers' compensation beneficiaries, who were necessary parties, the court properly sustained demurrer on basis that carrier lacked the legal capacity to sue but committed reversible error when it refused the carrier the opportunity to amend its complaint following dismissal of the complaint. United States Fid. & Guar. Co. v. Glass, 261 Ark. 45, 545 S.W.2d 924 (1977).

Jurisdiction.

The existence of an alleged contract between employee and employer's insurance carrier calling for a contribution by the carrier, as part of the costs of collection of one third of the amount the carrier was entitled to receive in the settlement was a matter over which commission had no jurisdiction. Maxcy v. John F. Beasley Constr. Co., 228 Ark. 253, 306 S.W.2d 849 (1957).

A circuit court had subject matter jurisdiction to award payment to an insurance carrier and to determine what constituted compensation under the Workers' Compensation Act pursuant to this section. Vanderpool v. Fidelity & Cas. Ins. Co., 327 Ark. 407, 939 S.W.2d 280 (1997).

Liability.

—In General.

Where an insurer paid workers' compensation payments to an employee while alive but delayed payments after death only to get a report from their doctor as to the cause of death, the insurer admitted liability under this section. Boulden v. Herring, 126 F. Supp. 885 (W.D. Ark. 1954), aff'd, 227 F.2d 303 (8th Cir. Ark. 1955).

Insurer was liable as a third-party tortfeasor to a worker alleged to have been injured as the result of failure of insurer to perform safety engineering and inspection. Horne v. Security Mut. Cas. Co., 265 F. Supp. 379 (E.D. Ark. 1967).

An employee may be liable as a third-party tortfeasor in a workers' compensation case. Neal v. Oliver, 246 Ark. 377, 438 S.W.2d 313 (1969).

Evidence insufficient to find contractor or subcontractor liable as third-party tortfeasors for injuries sustained by employee of sub-subcontractor. Kennedy v. United States Constr. Co., 545 F.2d 81 (8th Cir. 1976).

Subject to a few narrow exceptions, an employer is immune from liability for damages in a tort action brought by an injured employee. Fore v. Circuit Court, 292 Ark. 13, 727 S.W.2d 840 (1987), overruled in part, Lupo v. Lineberger, 313 Ark. 315, 855 S.W.2d 293 (Ark. 1993), overruled, Wise Co. v. Clay Circuit, 315 Ark. 333, 869 S.W.2d 6 (Ark. 1993), overruled in part, Wise Co. v. Clay Circuit, 315 Ark. 336A (1994).

—Supervisors.

Liability on the basis of a willful and malicious act by an employer's supervisor will not render the employer liable to the employee in tort. Fore v. Circuit Court, 292 Ark. 13, 727 S.W.2d 840 (1987), overruled in part, Lupo v. Lineberger, 313 Ark. 315, 855 S.W.2d 293 (Ark. 1993), overruled, Wise Co. v. Clay Circuit, 315 Ark. 333, 869 S.W.2d 6 (Ark. 1993), overruled in part, Wise Co. v. Clay Circuit, 315 Ark. 336A (1994).

Supervisory as well as non-supervisory employees are immune from suit for negligence in failing to provide a safe place to work. Allen v. Kizer, 294 Ark. 1, 740 S.W.2d 137 (Ark. 1987); Barnes v. Wilkiewicz, 301 Ark. 175, 783 S.W.2d 36 (1990).

Lien.

Plaintiff was limited to only one recovery for all damages and he could not, by electing to sue only for mental pain and suffering and disfigurement, defeat the lien of the insurance carrier on recovery. Barth v. Liberty Mut. Ins. Co., 212 Ark. 942, 208 S.W.2d 455 (1948) (decision under prior law).

Since a manner and method of perfecting the employer's lien on the proceeds is provided, the third-party tortfeasor should have every right to proceed according to the common law as if no employer were involved until such time as the lien is perfected. Hartford Ins. Group v. Carter, 251 Ark. 680, 473 S.W.2d 918 (1971)Limited byTravelers Ins. Co. v. McCluskey, 252 Ark. 1045, 483 S.W.2d 179 (Ark. 1972).

When an insured recovered on a tort claim from a third party by way of settlement, the workers' compensation carrier was entitled to an amount up to two-thirds of the amount recovered, but was not entitled to a lien against recovery of uninsured motorist proceeds. Courson v. Maryland Cas. Co., 475 F.2d 1030 (8th Cir. 1973).

Where deceased employee's parents bring suit for wrongful death and are neither dependents of the employee nor compensation beneficiaries, then neither the employer nor the insurance carrier has a lien on the moneys recovered from tortfeasor. Maryland Cas. Co. v. Rowe, 256 Ark. 221, 506 S.W.2d 569 (1974).

Where the settlement of an injured employee with a third-party tortfeasor provided that the release given by the employee would not affect the subrogation rights of the employer's compensation carrier, the compensation carrier was not entitled to a lien upon the proceeds of the settlement. St. Paul Fire & Marine Ins. Co. v. Wood, 242 Ark. 879, 416 S.W.2d 322 (1967).

The employer and its insurer waive their right to claim a lien or credit against the proceeds from a settlement reached by the employee and a third-party tortfeasor by failing to intervene in the third-party action, notwithstanding the absence of approval by the Workers' Compensation Commission or the court, or the preservation of their subrogation rights. John Garner Meats v. Ault, 38 Ark. App. 111, 828 S.W.2d 866 (1992).

This section provides not only for the intervening carrier's lien upon proceeds received in an action against a third party, but also spells out how the carrier's entitlement shall be computed. Public Employee Claims Div. v. Chitwood, 324 Ark. 30, 918 S.W.2d 163 (1996).

An insurance carrier was entitled to a statutory lien on sums recovered by a claimant from a third-party tortfeasor. Vanderpool v. Fidelity & Cas. Ins. Co., 327 Ark. 407, 939 S.W.2d 280 (1997).

An insurer-carrier's lien right against an insured's settlement with a third-party defendant is not necessarily “absolute”; rather, the settlement is subject to a court's approval after the carrier has been afforded adequate opportunity to be heard. General Accident Ins. Co. v. Jaynes, 343 Ark. 143, 33 S.W.3d 161 (2000).

In an action arising from a fatal automobile accident, the trial court did not err in refusing to enforce the lien right of the decedent's employer's workers's compensation carrier on the ground that the decedent's beneficiaries and survivors were not made whole by a settlement of the action. General Accident Ins. Co. v. Jaynes, 343 Ark. 143, 33 S.W.3d 161 (2000).

Payment of Claims.

Trial court's dismissal of claim against insurers who had already paid workers' compensation benefits with respect to claim was proper. Burkett v. PPG Indus., Inc., 294 Ark. 50, 740 S.W.2d 621 (1987).

Recovery Based on Settlement.

Trial court erred in finding that the Public Employee Claims Division (PECD), which had paid workers' compensation to the employee, was only entitled to two-thirds of the deposited funds instead of the net proceeds recovered in the settlement of the employee's negligence action against a third party; the record contained no reference to an agreement by which PECD agreed to limit its recovery to a portion of the deposited funds, and there was no reason on the record before the appellate court that PECD's recovery should be limited to an amount calculated from the deposited sum as opposed to the entire settlement as provided in this section. Public Emple. Claims Div. v. Clark, 2018 Ark. App. 215 (2018).

Release.

Release pursuant to consent judgment held to estop heirs covered by its terms but not spouse excluded from it. Jenkins v. Jenkins, 219 Ark. 547, 243 S.W.2d 646 (1951).

A release executed by an employee to a third-party tortfeasor before the filing of a workers' compensation claim was a defense to the employer's subsequent action against the tortfeasor brought pursuant to subsection (b). Hartford Ins. Group v. Carter, 251 Ark. 680, 473 S.W.2d 918 (1971)Limited byTravelers Ins. Co. v. McCluskey, 252 Ark. 1045, 483 S.W.2d 179 (Ark. 1972).

Settlement of Claims.

In a suit by an employee against a third-party tortfeasor, where the employee's attorney obtained a settlement by the use of the federal pretrial rules with a judgment to bind the settlement, the reasonableness of the settlement and the attorney fees should have been determined by the federal trial court judge rather than the commission. Boulden v. Herring, 126 F. Supp. 885 (W.D. Ark. 1954), aff'd, 227 F.2d 303 (8th Cir. Ark. 1955).

A settlement by the use of the federal pretrial rules with a judgment to bind the settlement was a “contested case” under this section, which gives the attorney's fees priority over the workers' compensation insurer's subrogation claims. Boulden v. Herring, 126 F. Supp. 885 (W.D. Ark. 1954), aff'd, 227 F.2d 303 (8th Cir. Ark. 1955).

Word “settlement” means compromise settlement, and this section had no application where amount recovered was by judgment on verdict in suit against third-party tortfeasor and court approved deduction from proceeds. Winfrey & Carlile v. Nickles, 223 Ark. 894, 270 S.W.2d 923 (1954).

For cases discussing apportionment of settlement in specific cases, see Maxcy v. John F. Beasley Constr. Co., 228 Ark. 253, 306 S.W.2d 849 (1957); Courson v. Maryland Cas. Co., 475 F.2d 1030 (8th Cir. 1973).

Since subsection (c) is not applicable to third-party tortfeasors, agreements between the injured employees and third persons need not be approved by the court. Hartford Ins. Group v. Carter, 251 Ark. 680, 473 S.W.2d 918 (1971)Limited byTravelers Ins. Co. v. McCluskey, 252 Ark. 1045, 483 S.W.2d 179 (Ark. 1972).

The purpose of subsection (c) is to permit the adjustment of controversies between the employee and employer and to require that settlements between them have the approval of either the court or the Workers' Compensation Commission to prevent an employee from compromising his claims through his tort action in a manner that would not be permitted under this chapter as by way of joint petition. Hartford Ins. Group v. Carter, 251 Ark. 680, 473 S.W.2d 918 (1971)Limited byTravelers Ins. Co. v. McCluskey, 252 Ark. 1045, 483 S.W.2d 179 (Ark. 1972).

Since the statutory purpose of this section is to protect the rights of both the compensation carrier and employee as between an employer or compensation carrier and employee, the proceeds of any compromise settlement of a tort claim is subject to the lien of the employer or the compensation carrier unless settlement has been approved by a court having jurisdiction or by Workers' Compensation Commission, after the carrier has been afforded adequate opportunity to be heard. Travelers Ins. Co. v. McCluskey, 252 Ark. 1045, 483 S.W.2d 179 (Ark. 1972).

Compensation carrier that paid benefits to injured employee could not claim proceeds of a compromise settlement of a tort claim where it was conditioned upon and specifically recognized carrier's subrogation rights. Travelers Ins. Co. v. McCluskey, 252 Ark. 1045, 483 S.W.2d 179 (Ark. 1972).

Settlement held properly approved. Froman v. Southern Farm Bureau Cas. Ins. Co., 528 F.2d 24 (8th Cir. 1976).

Employee and third-party tortfeasor may settle “around” the employer and its liability carrier, despite this section, where the settlement preserves the right of employer's carrier to proceed against the tortfeasor. Bituminous Ins. Co. v. Georgia-Pacific Corp., 2 Ark. App. 245, 620 S.W.2d 304 (1981); New Hampshire Ins. Co. v. Keller, 3 Ark. App. 81, 622 S.W.2d 198 (1981).

An employee and a third party tortfeasor may settle the employee's claim and putatively leave the workers' compensation carrier to pursue its claim separately if it desires, at least so long as the settlement is made prior to judgment; to do so does not violate the rule against splitting of causes of action because the third party for whose benefit the rule was designed has agreed to it. Commercial Union Ins. Co. v. Suitt Constr. Co., 673 F. Supp. 320 (E.D. Ark. 1987), aff'd without op., 860 F.2d 1087 (8th Cir. Ark. 1988).

The Worker's Compensation statute does not afford the carrier the right to veto any compromise with a third party which is not to its liking. International Paper Co. v. Wilson, 34 Ark. App. 87, 805 S.W.2d 668 (1991).

The district court did not abuse its discretion when it approved the settlement between the employee and the corporation and denied the employer's motion for reconsideration because the Arkansas judicial doctrine under which the injured employee and the third party tortfeasor could settle around the employer's statutory lien provided that its subrogation rights were preserved was not undercut by the statutory amendments to the workers' compensation statute, and application of the settle around doctrine did not mean double recovery, prevent cooperation among the parties, or conflict with statutory policies. Smith v. Chemical Leaman Tank Lines, 285 F.3d 750 (8th Cir. 2002).

Subrogation.

A compensation carrier's subrogation extends to sums paid to the estate of a deceased employee under the uninsured motorist provision of his automobile policy and covers sums paid to dependents of the decedent as well as those paid to his estate. Boehler v. Insurance Co. of N. Am., 290 F. Supp. 867 (E.D. Ark. 1968). But see Heiss v. Aetna Casualty & Surety Co., 250 Ark. 474, 465 S.W.2d 699 (1971).

Under subsection (b) employer's workers' compensation insurance carrier was entitled to subrogation and was entitled to have its subrogation claim satisfied in whole or in part out of plaintiff's award. Rhoads v. Service Machine Co., 329 F. Supp. 367 (E.D. Ark. 1971).

Workers' compensation carrier for employer of deceased employee who was killed within the scope of his employment when he was struck by uninsured motorist's vehicle was not entitled to subrogation against uninsured motorist benefits payable to decedent's administratrix. Travelers Ins. Co. v. National Farmers Union Property & Cas. Co., 252 Ark. 624, 480 S.W.2d 585 (1972).

The provisions of subsection (b) mean that the employer or insurance carrier is given the right to file with the court a notice of its lien to protect its subrogation rights but not the right to actively participate in the employee's action against the tortfeasor. Amos v. Stroud, 252 Ark. 1100, 482 S.W.2d 592 (1972).

Where insurance company was carrier of workers' compensation for employer of injured employee and insurer of third-party tortfeasor, insurance company was entitled to intervene in action by employee against tortfeasor and to recover the amount paid by it on workers' compensation claim. Burt v. Hartford Accident & Indem. Co., 252 Ark. 1236, 483 S.W.2d 218 (1972).

The fact that deceased's parents, before judgment in a wrongful death action, settled with one of the tortfeasors did not preclude insurance carrier from suing the tortfeasor for claims paid by it. Maryland Cas. Co. v. Rowe, 256 Ark. 221, 506 S.W.2d 569 (1974).

Surety subrogation rights were cut off on parents since they were neither dependents under subsection (a) nor beneficiaries under subsection (b) and had asked no medical or burial costs in settlement with tortfeasor just prior to trial. Maryland Cas. Co. v. Rowe, 256 Ark. 221, 506 S.W.2d 569 (1974).

Compromise settlement between plaintiff and third-party defendants must be approved by court or commission, but the burden of proof is not entirely on third-party defendants where insurance carrier seeks right of subrogation against plaintiff's recovery. Liberty Mut. Ins. Co. v. Billingsley, 256 Ark. 947, 511 S.W.2d 476 (1974).

Appropriate method of calculating compensation carrier's subrogation award was to deduct from gross settlement proceeds the cost of collection, and then to deduct from remainder any payment by tortfeasor's insurer of otherwise compensable medical expenses paid as part of settlement; figure thus obtained constitutes net proceeds of settlement and subrogation award should have been two-thirds of this amount. Washington County v. Ford, 21 Ark. App. 206, 730 S.W.2d 515 (1987).

A workers' compensation insurance carrier could not, as subrogee of an injured employee, sue the sole owner and officer of the employer as a third person for injuries sustained by the employee in the crash of an airplane piloted by the owner/officer. Zenith Ins. Co. v. VNE, Inc., 61 Ark. App. 165, 965 S.W.2d 805 (1998).

Workers' compensation insurance carrier was not entitled to a subrogation lien against the settlement proceeds generated by a settlement between the injured employee and the doctor who inflicted nerve damage on the injured employee during surgery for a work-related injury as subrogation was only allowed where the settlement made the injured employee whole and the evidence showed that the settlement did not make the injured employee whole. Travelers Ins. Co. v. O'Hara, 350 Ark. 6, 84 S.W.3d 419 (2002).

Utility company and its insurer could not enforce its subrogation lien rights against its employee, a lineman, who was injured on the job as the lineman was not made whole by the recovery against the third-party tortfeasor. South Cent. Ark. Elec. Coop. v. Buck, 354 Ark. 11, 117 S.W.3d 591 (2003).

Allowing an insurer to assert its right to a lien against the tortfeasor as well as its insured served to further the intent of this section given that the insurer was denied its statutory right to either participate in an action against the tortfeasor brought by the insured or have notice of the settlement and an opportunity to be heard; the trial court was incorrect in finding that a release signed by the insured operated to bar any claims by the insurer against the tortfeasor, and it was immaterial that the insurer failed to give notice of its claim to the tortfeasor's insurance company. Liberty Mut. Ins. Co. v. Whitaker, 83 Ark. App. 412, 128 S.W.3d 473 (2003).

Federal district court's application of a Arkansas Supreme Court decision, which applied the made-whole doctrine to the statutory subrogation lien in subdivision (b)(1) of this section, was appropriate and imperative given the rule that, in diversity cases, federal courts must follow state law as announced by the highest court in the state. Caldwell v. TACC Corp., 423 F.3d 784 (8th Cir. 2005).

Arkansas Workers' Compensation Commission did not err in finding that employee had not been made whole by a $ 25,000 settlement from a tortfeasor in a car accident that resulted in a compensable injury based on the fact that some of the settlement reflected an award for pain and suffering and the amount of wage loss suffered; therefore, an employer and its insurer were not entitled to subrogation. Logan County v. McDonald, 90 Ark. App. 409, 206 S.W.3d 258 (2005).

Appellate court reversed the Arkansas Workers' Compensation Commission's decision that an employer and the workers' compensation carrier were entitled to subrogation as the damages that employee received in a third party lawsuit after his attorney fees were paid were less than the actual jury verdict; thus, the employee had not been made whole. Yancey v. B&B Supply, 92 Ark. App. 348, 213 S.W.3d 657 (2005).

Third Party.

The term “third party” as used in this section can only mean a person or entity other than the first and second parties involved, and the first and second parties mean the injured employee and the employer or one liable under the section. Neal v. Oliver, 246 Ark. 377, 438 S.W.2d 313 (1969).

President and owner of corporation was the employer and was not “third party” under this section so as to permit tort suit against him at common law. Neal v. Oliver, 246 Ark. 377, 438 S.W.2d 313 (1969).

Provisions regarding “third party liability” to an injured worker show intent of General Assembly was to preclude insurer from independent liability. Burkett v. PPG Indus., Inc., 294 Ark. 50, 740 S.W.2d 621 (1987).

A working partner does not become a fellow employee, subject to third-party liability pursuant to this section, because of active involvement in the operations of the business. Hill v. Patterson, 313 Ark. 322, 855 S.W.2d 297 (1993).

Insurance carrier was not entitled to bring a contract action against special employer under this section because this section only provides for a carrier liable for compensation to maintain an action in tort, not contract, and then only against a third party, not an employer. National Union Fire Ins. v. Tri-State Iron & Metal, 323 Ark. 258, 914 S.W.2d 301 (1996).

A non-supervisory coemployee is not a “third party” within the meaning of subdivision (a)(1)(A) of this section. Brown v. Finney, 326 Ark. 691, 932 S.W.2d 769 (1996).

Insurer and safety consultant were not immune under the exclusive remedy provision of § 11-9-105 because they were “third parties” as defined by this section. Wilson v. Rebsamen Ins., Inc., 330 Ark. 687, 957 S.W.2d 678 (1997).

Appellees were third parties under the Workers' Compensation Act and, thus, employee had a right to maintain an action against them in court despite the fact that he had already pursued a compensation claim against his employer; under subdivision (a)(1)(A) of this section, employee's pursuit of a claim for compensation against his or her employer does not effect employee's right to maintain an action in court against a third-party tortfeasor, and employee was not required to make a choice between enforcing his rights under the workers' compensation laws and his constitutional right to a jury trial against the third-party tortfeasor. Craven v. Fulton Sanitation Serv., 361 Ark. 390, 206 S.W.3d 842 (2005).

There was substantial evidence to support a finding that claimant was not a special employee of the company because, although the company's work was being performed when an injury was suffered, there was no contract for hire with the company and the employer was the one controlling the details of claimant's work. Nucor Corp. v. Rhine, 366 Ark. 550, 237 S.W.3d 52 (2006).

Workers' Compensation Commission found that parent companies and principals and stockholders of the employer were also employers for the purpose of the exclusive-remedy provision, which was not a clearly wrong interpretation of § 11-9-105 under the circumstances; the finding that the parent companies were employers and other defendants were third parties was supported by substantial evidence, and as the deceased employee's widow was receiving death benefits from the employer, she was not allowed to sue the parent companies in tort for alleged workplace negligence. Myers v. Yamato Kogyo Co., 2019 Ark. App. 306, 578 S.W.3d 296 (2019), review granted, 2019 Ark. LEXIS 264 (Sept. 19, 2019).

Underinsured Motorist Insurance.

An action by an employee against his employer's insurance carrier for underinsured motorist benefits was not barred by this section. Elam v. Hartford Fire Ins. Co., 344 Ark. 555, 42 S.W.3d 443 (2001).

Court denied summary judgment to the insurer of an employer in an employee's action for underinsured motorists benefits because the employee's settlement of the subrogation claim for less than would have been paid based on the amount paid by the tortfeasor was not an admission that the employee had been made whole and in no way waived her right to underinsured benefits or was inconsistent with her position that she had not been made whole, and there were disputed facts over whether the employee had been made whole under this section as there was no record evidence reflecting her damages. Colwell v. Shelter Mut. Ins. Co., — F. Supp. 2d —, 2008 U.S. Dist. LEXIS 16651 (E.D. Ark. Mar. 3, 2008).

Cited: Consolidated Underwriters of S.C. Ins. Co. v. Bradshaw, 136 F. Supp. 395 (W.D. Ark. 1955); Curran v. Security Ins. Co., 195 F. Supp. 562 (W.D. Ark.); Ragsdale v. Watson, 201 F. Supp. 495 (W.D. Ark. 1962); McFall v. United States Tobacco Co., 246 Ark. 43, 436 S.W.2d 838 (1969); Ellington v. Hartford Steam Boiler Inspection & Ins. Co., 53 F.R.D. 280 (W.D. Ark. 1971); Holiday Inns of Am., Inc. v. Wilson, 253 Ark. 915, 489 S.W.2d 806 (1973); Midwestern Distribution, Inc. v. Paris Motor Freight Lines, 563 F. Supp. 489 (E.D. Ark. 1983); Hill v. CGR Medical Corp., 9 Ark. App. 334, 660 S.W.2d 171 (1983); Hill v. CGR Medical Corp., 282 Ark. 35, 665 S.W.2d 274 (Ark. 1984); Simmons First Nat'l Bank v. Thompson, 285 Ark. 275, 686 S.W.2d 415 (1985); Lewis v. Crowe, 296 Ark. 175, 752 S.W.2d 280 (1988); Daniels v. Cravens, 297 Ark. 388, 761 S.W.2d 942 (1988); Wilson v. Beloit Corp., 869 F.2d 1162 (8th Cir. 1989); Gullett v. Brown, 307 Ark. 385, 820 S.W.2d 457 (1991); Bushong v. Garman Co., 311 Ark. 228, 843 S.W.2d 807 (1992); Stapleton v. M.D. Limbaugh Constr. Co., 333 Ark. 381, 969 S.W.2d 648 (1998); Northwest Ark. Area Agency on Aging v. Golmon, 70 Ark. App. 136, 15 S.W.3d 363 (2000); Phillips v. United States, 422 F.3d 709 (8th Cir. 2005).