When an employee receives an injury or incurs an occupational disease or an occupational hearing loss for which compensation is payable under this chapter, chapter 85A, or chapter 85B, and which injury or occupational disease or occupational hearing loss is caused under circumstances creating a legal liability against some person, other than the employee’s employer or any employee of such employer as provided in section 85.20 to pay damages, the employee, or the employee’s dependent, or the trustee of such dependent, may take proceedings against the employer for compensation, and the employee or, in case of death, the employee’s legal representative may also maintain an action against such third party for damages. When an injured employee or the employee’s legal representative brings an action against such third party, a copy of the original notice shall be served upon the employer by the plaintiff, not less than ten days before the trial of the case, but a failure to give such notice shall not prejudice the rights of the employer, and the following rights and duties shall ensue:
1. If compensation is paid the employee or dependent or the trustee of such dependent under this chapter, the employer by whom the same was paid, or the employer’s insurer which paid it, shall be indemnified out of the recovery of damages to the extent of the payment so made, with legal interest, except for such attorney fees as may be allowed, by the district court, to the injured employee’s attorney or the attorney of the employee’s personal representative, and shall have a lien on the claim for such recovery and the judgment thereon for the compensation for which the employer or insurer is liable. In order to continue and preserve the lien, the employer or insurer shall, within thirty days after receiving notice of such suit from the employee, file, in the office of the clerk of the court where the action is brought, notice of the lien.
2. In case the employee fails to bring such action within ninety days, or where a city or a city under special charter is such third party, within thirty days after written notice so to do given by the employer or the employer’s insurer, as the case may be, then the employer or the insurer shall be subrogated to the rights of the employee to maintain the action against such third party, and may recover damages for the injury to the same extent that the employee might. In case of recovery, the court shall enter judgment for distribution of the proceeds thereof as follows:
a. A sum sufficient to repay the employer for the amount of compensation actually paid by the employer to that time.
b. A sum sufficient to pay the employer the present worth, computed at the interest rate provided in section 535.3 for court judgments and decrees, of the future payments of compensation for which the employer is liable, but the sum is not a final adjudication of the future payments which the employee is entitled to receive and if the sum received by the employer is in excess of the amount required to pay the compensation, the excess shall be paid to the employee.
c. The balance, if any, shall be paid over to the employee.
3. Before a settlement shall become effective between an employee or an employer and such third party who is liable for the injury, it must be with the written consent of the employee, in case the settlement is between the employer or insurer and such third person; and the consent of the employer or insurer, in case the settlement is between the employee \n Tue Dec 09 22:29:51 2025 Iowa Code 2026, Chapter 85 (59, 0) 7 WORKERS’ COMPENSATION, §85.25\n\nand such third party; or on refusal of consent, in either case, then upon the written approval of the workers’ compensation commissioner.
4. A written memorandum of any settlement, if made, shall be filed by the employer or insurance carrier in the office of the workers’ compensation commissioner.
5. For subrogation purposes, any payment made unto an injured employee, the employee’s guardian, parent, next friend, or legal representative, by or on behalf of any third party, or the third party’s principal or agent liable for, connected with, or involved in causing an injury to such employee shall be considered as having been so paid as damages resulting from and because said injury was caused under circumstances creating a legal liability against said third party, whether such payment be made under a covenant not to sue, compromise settlement, denial of liability or otherwise.
6. When the state of Iowa has paid any compensation or benefits under the provisions of this chapter, the word “employer” as used in this section shall mean and include the state of Iowa. [S13, §2477-m6; C24, 27, 31, 35, 39, §1382; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §85.22] 83 Acts, ch 105, §2; 98 Acts, ch 1061, §11; 2018 Acts, ch 1041, §26; 2020 Acts, ch 1063, §42 Referred to in §85.68 \n
Notes of Decisions
Cited in
106
cases (
3 in the last 5 years), 1955–2025 · leading case:
Shirley v. Pothast, 508 N.W.2d 712 (Iowa 1993).
Shirley v. Pothast, 508 N.W.2d 712 (Iowa 1993).
· cites it 58× “Aetna objected to the structure of the settlement noting that “[tjhere seem[ed] to be a clear effort to simply avoid the workers’ compensation lien to the detriment of the Employer and Insurance Carrier and in contravention of Iowa Code § 85.22 .” The Shirleys then filed a…”
Am. Mut. Liab. Ins. v. State Auto. Ins. Ass'n, 72 N.W.2d 88 (Iowa 1955).
· cites it 68× “, brought this law action under Code section 85.22 as subrogee of P. H. Underwood, employee of Michael-Leonard, to recover from third parties for personal injuries to him.”
Sourbier v. State, 498 N.W.2d 720 (Iowa 1993).
· cites it 36× “Iowa Code § 85.22 (1) (1989). In this case we must decide if the recovery of a damage award for pain and suffering is subject to the statutory lien.”
Sladek v. K Mart Corp., 493 N.W.2d 838 (Iowa 1992).
· cites it 28× “An Iowa statute, Iowa Code § 85.22 (1991), 1 grants employers subrogation rights in tort recoveries obtained by their employees, to the extent the employees have been paid workers’ compensation benefits for the same injuries.”
March v. Pekin Ins. Co., 465 N.W.2d 852 (Iowa 1991).
· cites it 32× “It argues that because Pekin is neither March’s employer nor coemployee, it must be a “third party” whose obligation to March is the “circumstance creating a legal liability” upon which appellant’s subrogation claim rests.”
Schonberger v. Roberts, 456 N.W.2d 201 (Iowa 1990).
· cites it 22× “Since 1913 an Iowa statute, now Iowa Code section 85.22 (1989), has provided a right of indemnity to workers' compensation employers (or their insurers) for amounts paid under the Act from recoveries realized by the worker in tort actions for the same injuries.”
Daniels v. Hi-Way Truck Equip., Inc., 505 N.W.2d 485 (Iowa 1993).
· cites it 38× “Iowa Code § 85.22 (1). If the employee fails to bring an action against a third-party tortfeasor, the employer or the employer’s insurer has a right of subrogation and may maintain an action against such third-party tortfeasor.”
Toomey v. Surgical Servs., P.C., 558 N.W.2d 166 (Iowa 1997).
· cites it 46× “See Iowa Code § 85.22 (1). United Fire also filed a petition of intervention in the action, see Iowa Code § 85.”
Fisher v. Keller Indus., Inc., 485 N.W.2d 626 (Iowa 1992).
· cites it 26× “Iowa Code § 85.22 (1) (“indemnified out of the recovery of damages to the extent of payment so made, with interest”).”
— Iowa Code § 85.22(1) — 41 cases
Shirley v. Pothast, 508 N.W.2d 712 (Iowa 1993).
“Aetna objected to the structure of the settlement noting that “[tjhere seem[ed] to be a clear effort to simply avoid the workers’ compensation lien to the detriment of the Employer and Insurance Carrier and in contravention of Iowa Code § 85.22 .” The Shirleys then filed a…”
Toomey v. Surgical Servs., P.C., 558 N.W.2d 166 (Iowa 1997).
“See Iowa Code § 85.22 (1). United Fire also filed a petition of intervention in the action, see Iowa Code § 85.”
Sourbier v. State, 498 N.W.2d 720 (Iowa 1993).
“Iowa Code § 85.22 (1) (1989). In this case we must decide if the recovery of a damage award for pain and suffering is subject to the statutory lien.”
— Iowa Code § 85.22(2) — 9 cases
Shirley v. Pothast, 508 N.W.2d 712 (Iowa 1993).
“Aetna objected to the structure of the settlement noting that “[tjhere seem[ed] to be a clear effort to simply avoid the workers’ compensation lien to the detriment of the Employer and Insurance Carrier and in contravention of Iowa Code § 85.22 .” The Shirleys then filed a…”
Fisher v. Keller Indus., Inc., 485 N.W.2d 626 (Iowa 1992).
“Iowa Code § 85.22 (1) (“indemnified out of the recovery of damages to the extent of payment so made, with interest”).”
Sourbier v. State, 498 N.W.2d 720 (Iowa 1993).
“Iowa Code § 85.22 (1) (1989). In this case we must decide if the recovery of a damage award for pain and suffering is subject to the statutory lien.”
— Iowa Code § 85.22(2)(b) — 1 case
Shirley v. Pothast, 508 N.W.2d 712 (Iowa 1993).
“Aetna objected to the structure of the settlement noting that “[tjhere seem[ed] to be a clear effort to simply avoid the workers’ compensation lien to the detriment of the Employer and Insurance Carrier and in contravention of Iowa Code § 85.22 .” The Shirleys then filed a…”
— Iowa Code § 85.22(3) — 6 cases
Shirley v. Pothast, 508 N.W.2d 712 (Iowa 1993).
“Aetna objected to the structure of the settlement noting that “[tjhere seem[ed] to be a clear effort to simply avoid the workers’ compensation lien to the detriment of the Employer and Insurance Carrier and in contravention of Iowa Code § 85.22 .” The Shirleys then filed a…”
Daniels v. Hi-Way Truck Equip., Inc., 505 N.W.2d 485 (Iowa 1993).
“Iowa Code § 85.22 (1). If the employee fails to bring an action against a third-party tortfeasor, the employer or the employer’s insurer has a right of subrogation and may maintain an action against such third-party tortfeasor.”
— Iowa Code § 85.22(5) — 2 cases
Sladek v. K Mart Corp., 493 N.W.2d 838 (Iowa 1992).
“An Iowa statute, Iowa Code § 85.22 (1991), 1 grants employers subrogation rights in tort recoveries obtained by their employees, to the extent the employees have been paid workers’ compensation benefits for the same injuries.”
March v. Pekin Ins. Co., 465 N.W.2d 852 (Iowa 1991).
“It argues that because Pekin is neither March’s employer nor coemployee, it must be a “third party” whose obligation to March is the “circumstance creating a legal liability” upon which appellant’s subrogation claim rests.”
— Iowa Code § 85.22(l) — 1 case
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