§ 227 — Actionable injuries in claims for disability benefits; subrogation

§ 227. Actionable injuries in claims for disability benefits;\nsubrogation. 1. If an employee entitled to disability benefits under\nthis article be disabled by injury caused by the negligence or wrong of\na third party, such employee need not elect whether to take such\ndisability benefits or to pursue his remedy against such third party,\nbut may take his benefits under this article. The carrier liable for\npayment of disability benefits under this article or the chairman in\ncase of benefits paid under section two hundred seven or two hundred\nthirteen shall have a lien on the proceeds of any recovery from such\nthird party, whether by judgment, settlement or otherwise, after the\ndeduction of reasonable and necessary expenditures, including attorneys'\nfees, incurred in effecting such recovery, to the extent of the total\namount of disability benefits provided by this article and paid, and to\nsuch extent such recovery shall be deemed for the benefit of such\ncarrier or the chairman. Should the employee secure a recovery from such\nthird party, whether by judgment, settlement or otherwise, such employee\nmay apply on notice to such lienor to the court in which the third party\naction was instituted, or to a court of competent jurisdiction if no\naction was instituted, for an order apportioning the reasonable and\nnecessary expenditures, including attorneys' fees, incurred in effecting\nsuch recovery. Such expenditures shall be equitably apportioned by the\ncourt between the employee and the lienor. Notice of the commencement of\nsuch action shall be given within ninety days thereafter to the employer\nor carrier or to the chairman, as the case may be. The foregoing rights,\nlimitations, and procedures shall also apply to actions and recoveries\nunder the employers' liability act, and section six hundred\neighty-eight, title forty-six, United States code, and under the\nmaritime doctrine of wages, maintenance and cure. Any of the foregoing\nproviders of disability benefits which has recovered a lien pursuant to\nthe provisions hereof against the recovery of a person injured on or\nafter December first, nineteen hundred seventy-seven and before July\nfirst, nineteen hundred seventy-eight, through the use or operation of a\nmotor vehicle in this state, shall notify such person by certified mail,\nin a manner to be approved by the chairman and the superintendent of\nfinancial services, of the responsibilities of an "insurer" (as defined\nin subsection (g) of section five thousand one hundred two of the\ninsurance law), to reimburse such person under such circumstances to the\nextent that the recovered lien represents first party benefits as\ndefined in article fifty-one of the insurance law.\n 1-a. Notwithstanding any other provisions of this article the carrier\nliable for payment of disability benefits under this article, or the\nchairman in case benefits are paid under section two hundred seven or\nsection two hundred thirteen of this chapter shall not have a lien on\nthe proceeds of any recovery received pursuant to subsection (a) of\nsection five thousand one hundred four of the insurance law, whether by\njudgment, settlement or otherwise for disability benefits paid, which\nwere in lieu of first party benefits which another insurer would have\notherwise been obligated to pay under article fifty-one of the insurance\nlaw. The sole remedy of any of the foregoing providers to recover the\npayments in the situation specified in the preceding sentence shall be\npursuant to the settlement procedures contained in section five thousand\none hundred five of the insurance law.\n 2. If such disabled employee has been paid disability benefits under\nthis article but has failed to commence action against such other within\nsix months prior to the expiration of the statute of limitations, the\ncarrier or the chairman, as the case may be, may maintain an action\nagainst such third party. If the carrier or the chairman, as the case\nmay be, having paid disability benefits to a disabled employee, who is\nalso a "covered person" (as defined in subsection (j) of section five\nthousand one hundred two of the insurance law), and who was injured in a\nmotor vehicle accident in this state on and after December first,\nnineteen hundred seventy-seven and before July first, nineteen hundred\nseventy-eight, maintains an action against such third party, who is also\na "covered person", and recovers, whether by judgment, settlement or\notherwise, it shall advise the disabled employee, by certified mail, in\na manner to be approved by the chairman and the superintendent of\nfinancial services, of the responsibility of an "insurer" (as defined in\nsubsection (g) of section five thousand one hundred two of the insurance\nlaw) to further compensate such disabled employee.\n 2-a. Notwithstanding any other provisions of this article, the failure\nof a "covered person" (as defined in subsection (j) of section five\nthousand one hundred two of the insurance law), who has been paid\ndisability benefits under this article for injuries arising out of the\nuse or operation of a motor vehicle in this state, to commence an action\nagainst such other within six months prior to the expiration of the\nstatute of limitations, shall not operate to permit the carrier or the\nchairman to institute an action against such other third party for\nrecovery of disability benefits paid which were in lieu of first party\nbenefits which an insurer would have otherwise been obligated to pay\nunder article fifty-one of the insurance law unless such third party is\nnot a "covered person". The sole remedy of any of the foregoing\nproviders to recover the payments in the situation specified in the\npreceding sentence when the other party is a "covered person" shall be\npursuant to the settlement procedures contained in section five thousand\none hundred five of the insurance law.\n 3. A compromise of any such cause of action by the employee in an\namount less than the benefits provided by this article shall be made\nonly with the written consent of the carrier or the chairman, as the\ncase may be.\n