CO Code § 8-41-203 (2021)
2021 Colorado Code|Title 8 - Labor and Industry|Article 41 - Coverage and Liability|Part 2 - Coverage|§ 8-41-203. Negligence of Stranger - Remedies - Subrogation - Actions - Compromise

     If any employee entitled to compensation under articles 40 to 47 of this title is injured or killed by the negligence or wrong of another not in the same employ, such injured employee or, in case of death, such employee's dependents, may take compensation under said articles and may also pursue a remedy against the other person to recover any damages in excess of the compensation available under said articles.    The payment of compensation pursuant to articles 40 to 47 of this title shall operate as and be an assignment of the cause of action against such other person to Pinnacol Assurance, the medical disaster insurance fund, the major medical insurance fund, or the subsequent injury fund, if compensation is payable from said funds, and otherwise to the person, association, corporation, or insurance carrier liable for the payment of such compensation. Said insurance carrier shall not be entitled to recover any sum in excess of the amount of compensation for which said carrier is liable under said articles to the injured employee, but to that extent said carrier shall be subrogated to the rights of the injured employee against said third party causing the injury. If the injured employee proceeds against such other person, then Pinnacol Assurance, the medical disaster insurance fund, the major medical insurance fund, the subsequent injury fund, or such other person, association, corporation, or insurance carrier, as the case may be, shall contribute only the deficiency, if any, between the amount of the recovery against such other person actually collected and the compensation provided by said articles in such case.    The right of subrogation provided by this section shall apply to and include all compensation and all medical, hospital, dental, funeral, and other benefits and expenses to which the employee or, if the employee is deceased, the employee's dependents are entitled under the provisions of said articles, including parts 2 and 3 of article 46 of this title, or for which the employee's employer or insurance carrier is liable or has assumed liability.    The assigned and subrogated cause of action provided by this section, together with the right to recover future benefits:   Shall extend to all moneys collected from the third party causing the injury for all:   Economic damages; and    Physical impairment and disfigurement damages; except that, to the extent the trier of fact makes a separate award for disfigurement damages, the right of the beneficiary of the assigned interest to recover from such disfigurement damages shall be limited to the amount the beneficiary of the assigned interest paid, or is obligated to pay, in disfigurement damages pursuant to articles 40 to 47 of this title; and       Shall not extend to moneys collected for noneconomic damages awarded for pain and suffering, inconvenience, emotional stress, or impairment of quality of life.         Except as otherwise provided in subparagraph (II) of this paragraph (e), the amount of the assigned and subrogated cause of action shall be reduced by an amount equal to the reasonable attorney fees and costs paid by the injured employee or, if the employee is deceased, the employee's dependents, in pursuing the recovery of the assigned and subrogated cause of action and the collection of such recovery. (e) (I) Except as otherwise provided in subparagraph (II) of this paragraph (e), the amount of the assigned and subrogated cause of action shall be reduced by an amount equal to the reasonable attorney fees and costs paid by the injured employee or, if the employee is deceased, the employee's dependents, in pursuing the recovery of the assigned and subrogated cause of action and the collection of such recovery.    If the beneficiary of the assigned and subrogated cause of action elects to independently pursue such assigned cause of action, any recovery by such beneficiary shall not be reduced by any attorney fees and costs incurred by the employee. If the beneficiary of the assigned and subrogated cause of action elects to intervene within ninety days after receiving the notice required by paragraph (c) of subsection (4) of this section, any recovery by such beneficiary shall not be reduced by any attorney fees and costs incurred by the employee. If such beneficiary elects to intervene after the expiration of such ninety-day period, the court may reduce the beneficiary's recovery by a reasonable amount for any attorney fees and costs incurred by the employee after the end of such ninety-day period and before receiving notice that the beneficiary intends to intervene.       Nothing in this section shall be construed as limiting in any way the right of the injured employee to take compensation under articles 40 to 47 of this title and also proceed against the third party causing the injury to recover any damages in excess of the subrogation rights described in this section.       Such a cause of action assigned to Pinnacol Assurance may be prosecuted or compromised by it. A compromise of any such cause of action by the employee or, if the employee is deceased, the employee's dependents at an amount less than the compensation provided for by articles 40 to 47 of this title shall be made only with the written approval of the chief executive officer of Pinnacol Assurance, if the deficiency of compensation would be payable from the Pinnacol Assurance fund, and otherwise with the written approval of the person, association, corporation, or insurance carrier liable to pay the same. Such written approval shall not be unreasonably withheld. Failure to obtain such written approval shall entitle the party responsible for paying workers' compensation benefits to be reimbursed for all benefits paid from, and offset any future liability under articles 40 to 47 of this title against, the entire proceeds recovered without any credit for reasonable attorney fees and costs as provided in paragraph (e) of subsection (1) of this section. If such approval is not obtained, the employee or, if the employee is deceased, the employee's dependents shall not be liable for any plaintiff's attorney fees for the third-party recovery on that portion of any recovery equal to the assigned and subrogated interest and are not subject to any action for refusal to pay such plaintiff's attorney fees resulting from the third-party case.    If an employee is killed by the negligence or wrong of another not in the same employ and the dependents of such employee who are entitled to compensation under articles 40 to 47 of this title are minors, the decision to pursue or compromise any claim against a third party shall be made by such minor or shall be made on the minor's behalf by a parent of such minor or by the minor's next friend or duly appointed guardian, as the director of the division of workers' compensation may determine by rule in each case. Once such decision is made, the person who made the decision shall also bear the responsibility to provide all notices required by this section.        If the employee or, if the employee is deceased, the employee's dependents make a demand upon or a request of a person or entity not in the same employ as the employee to seek recovery for damages arising from actions of such other person or entity, the employee or dependents shall also give written notice, within ten days, to the division of workers' compensation and to all parties who may be responsible for paying benefits to the employee or dependents under articles 40 to 47 of this title. (a) (I)If the employee or, if the employee is deceased, the employee's dependents make a demand upon or a request of a person or entity not in the same employ as the employee to seek recovery for damages arising from actions of such other person or entity, the employee or dependents shall also give written notice, within ten days, to the division of workers' compensation and to all parties who may be responsible for paying benefits to the employee or dependents under articles 40 to 47 of this title.    If the party responsible for paying workers' compensation benefits under articles 40 to 47 of this title to the employee or, if the employee is deceased, the employee's dependents, makes a demand upon or a request of a person or entity not in the same employ as the employee to seek recovery for damages arising from actions of the other person or entity, the party responsible for paying the workers' compensation benefits shall also give written notice, within ten days, to the division of workers' compensation and to the employee or, if the employee is deceased, to the employee's dependents.    The notice requirements of this paragraph (a) shall not apply to demands or requests seeking the recovery of medical payments only, and not seeking the recovery of any other type of damage or loss.       The notice required by this subsection (4) shall contain the following:   A description of the claim;    The names and addresses of any and all other persons believed to be negligent;    The name and address of any attorney representing the employee or dependents;    The name and address of any attorney representing other persons believed to be negligent; and    The name, address, and telephone number of the insurance company or third-party administrator.         Except as provided in subparagraph (II) of this paragraph (c), at least twenty days before commencing a lawsuit or arbitration proceeding to recover damages arising from actions of another person or entity, the party initiating such lawsuit or arbitration shall give written notice to all parties who may be responsible for paying benefits to the employee or dependents under articles 40 to 47 of this title and to the employee or, if the employee is deceased, the employee's dependents. Such notice shall contain all of the information set out in paragraph (b) of this subsection (4) and shall be accompanied by a draft copy of the complaint. (c) (I) Except as provided in subparagraph (II) of this paragraph (c), at least twenty days before commencing a lawsuit or arbitration proceeding to recover damages arising from actions of another person or entity, the party initiating such lawsuit or arbitration shall give written notice to all parties who may be responsible for paying benefits to the employee or dependents under articles 40 to 47 of this title and to the employee or, if the employee is deceased, the employee's dependents. Such notice shall contain all of the information set out in paragraph (b) of this subsection (4) and shall be accompanied by a draft copy of the complaint.    If any applicable statutory limitation period would expire before such twenty days have passed, the party initiating such lawsuit or arbitration may file or serve the complaint, or otherwise act to toll the running of such limitation period, before such twenty days have passed. The party initiating the lawsuit or arbitration shall provide the notice required by subparagraph (I) of this paragraph (c) within twenty days after commencing such action.       If the employee or dependents fail to provide the written notice required pursuant to subparagraph (I) of paragraph (a) of this subsection (4):   The party responsible for paying workers' compensation benefits shall be entitled to reimbursement from all moneys collected from the third party for all economic damages and for all physical impairment and disfigurement damages, without any credit for reasonable attorney fees as provided in paragraph (e) of subsection (1) of this section. If the trier of fact makes a separate award for disfigurement damages, reimbursement from such disfigurement damage award shall be limited to the amount the party paying workers' compensation benefits paid, or is obligated to pay, in disfigurement damages pursuant to articles 40 to 47 of this title. Such rights shall not extend to moneys collected for noneconomic damages awarded for pain and suffering, inconvenience, emotional stress, or impairment of quality of life.    The employee or dependents shall not be liable for any plaintiff's attorney fees for the third-party recovery on that portion of any recovery equal to the assigned and subrogated interest and are not subject to any action for refusal to pay such plaintiff's attorney fees resulting from the third-party case.       If the party responsible for paying workers' compensation benefits under articles 40 to 47 of this title fails to provide the written notice required pursuant to subparagraph (II) of paragraph (a) of this subsection (4), the amount of the claim shall be reduced by fifty dollars for each day such notice was not given to the employee or, if the employee is deceased, the employee's dependents, in an amount not to exceed twenty percent of the amount of the total assigned interest at the time such notice should have been given. The failure to provide such notice shall be a reassignment of a portion of the claim to the employee or, if the employee is deceased, the employee's dependents, in an amount equal to the penalty.        History. Source: L. 90: Entire article R&RE, p. 477, § 1, effective July 1; (1) amended, p. 1843, § 29, effective July 1. L. 2002: (1) and (2) amended, p. 1882, § 29, effective July 1. L. 2003: Entire section amended, p. 2613, § 1, effective July 1. L. 2004: (4) amended, p. 77, § 1, effective August 4.    Editor's note:   This section is similar to former § 8-52-108 as it existed prior to 1990.   ANNOTATION   Analysis     I. GENERAL CONSIDERATION.    II. ELECTION.    III. ASSIGNMENT ANDSUBROGATION.     I. GENERAL CONSIDERATION.   Law reviews. For article, “Colorado Practice in Workmen's Compensation”, see 31 Rocky Mt. L. Rev. 500 (1959). For article, “The Enterprise Liability Theory of Torts”, see 47 U. Colo. L. Rev. 153 (1976). For article, “A Primer on Workers' Compensation Subrogation”, see 21 Colo. Law. 1931 (1992). For article, “Applying Tate and Kester: The Status of Subrogation and Set-Off Rights”, see 21 Colo. Law. 2419 (1992). For article, “Judicial Apportionment of Personal Injury Claims”, see 29 Colo. Law. 77 (May 2000). For article, “Update on Colorado Appellate Decisions in Workers' Compensation Law”, see 33 Colo. Law. 117 (Nov. 2004). For article, “Workers' Compensation Subrogation Rights Against Worker Recoveries from Third-Party Tortfeasors”, see 38 Colo. Law. 41 (Jan. 2009).   Annotator's note. Since § 8-41-203 is similar to § 8-52-108 as it existed prior to the 1990 repeal and reenactment of the “Workers' Compensation Act of Colorado”, articles 40 to 47 of this title, relevant cases construing that provision have been included in the annotations to this section.   This section recognizes common-law rights against tortfeasors who cause compensable injuries. Indus. Comm'n v. Standard Ins. Co., 149 Colo. 587 , 370 P.2d 156 (1962).   If an employee fails to procure the insurer's consent in accordance with subsection (2), the employee forfeits his right to receive future benefits. Matter of Death of Peterkin, 729 P.2d 977 (Colo. 1986); Sullivan v. Indus. Claim Appeals Office, 796 P.2d 31 (Colo. App. 1990); Eckhardt v. Vill. Inn (Vicorp), 826 P.2d 855 (Colo. 1992).   Purpose of notice is to give insurance carrier an opportunity to assess its rights in a case which may result in an improvident settlement by an injured employee. Thus, where no notice is given, there is no duty to act reasonably because the carrier is unaware that it should act at all. Eckhardt v. Vill. Inn (Vicorp), 826 P.2d 855 (Colo. 1992).   An insurance carrier which has been properly notified about a suit brought in good faith by an injured employee has an obligation to act reasonably when the injured employee requests approval of a settlement in such a suit. Eckhardt v. Vill. Inn (Vicorp), 826 P.2d 855 (Colo. 1992).   Obligation to act reasonably requires insurance carrier to make a good faith appraisal of the suit and any proposed settlement and act accordingly. Eckhardt v. Vill. Inn (Vicorp), 826 P.2d 855 (Colo. 1992).   An insurance carrier must fairly and reasonably evaluate the suit before refusing approval of a settlement. Once it has been apprised that a good-faith suit by an injured employee has deteriorated, the carrier cannot simply seize that opportunity to avoid payment of future compensation by withholding consent to settlement. Eckhardt v. Vill. Inn (Vicorp), 826 P.2d 855 (Colo. 1992).   In determining whether an insurance carrier's refusal is reasonable, the court will look to the insurance carrier's actions taken in light of all circumstances. Eckhardt v. Vill. Inn (Vicorp), 826 P.2d 855 (Colo. 1992).   Workers' compensation carrier is granted the same immunity from suit by the injured employee as the employer has. Therefore, no third-party action could be brought against a carrier for negligently conducting safety inspections undertaken pursuant to its capacity as carrier. McHargue v. Stokes Div. of Pennwalt Corp., 649 F. Supp. 1388 (D. Colo. 1986 ).   An insurer's general knowledge of, and consent to, third-party negotiations does not constitute participation in, or encouragement of, a specific settlement agreement. Sullivan v. Indus. Claim Appeals Office, 796 P.2d 31 (Colo. App. 1990).   But the workmen's compensation act is a bar to a suit by an employee against a co-employee for injuries sustained when both are acting within the course of their employment. Nelson v. Harding, 29 Colo. App. 76, 480 P.2d 851 (1970); Sieck v. Trueblood, 29 Colo. App. 432, 485 P.2d 134 (1971).   Co-employee immunity for intentional wrongs is strictly limited to injuries sustained where both the tortfeasor and the victim are acting in the course of their employment. Kandt v. Evans, 645 P.2d 1300 (Colo. 1982).   Section does not abridge remedy against third person. The law does not attempt in any way to abridge the remedies which an employee of one person may have at law against a third person for a tort which such third person commits against him. Kirkham v. Hickerson Bros. Truck Co., 29 Colo. App. 303, 485 P.2d 513 (1971).   And only limitation is that third person shall not be “in the same employ”. Under this section, the injured person may elect to proceed against a third person and the only limitation is that the third person shall not be “in the same employ”. Chartier v. Winslow Crane Serv. Co., 142 Colo. 294 , 350 P.2d 1044 (1960).   Otherwise, remedy is limited to workmen's compensation. Where the employer is the primary, if not sole, beneficiary of the fellow employee's action, the fellow employee is acting within the scope of his employment at the time of the accident, and the provisions of this section, allowing an injured employee to elect whether to pursue a cause of action against a third-party tortfeasor, are not applicable. The employee's remedy is limited to recovery under the workmen's compensation act. Sieck v. Trueblood, 29 Colo. App. 432, 485 P.2d 134 (1971).   Thus, where a fellow employee and an outsider are both at fault in causing injury to a worker who elects the benefits of workmen's compensation, such election in practical effect nullifies the fault as between the fellow employee and the injured worker but does not vitiate the fault as between the outsider and the injured worker. Hamblen v. Santa Fe Trail Transp. Co., 101 F. Supp. 799 (D. Colo. 1951 ).   Employee cannot join fellow employee in action against third party. An employee has no cause of action against a fellow employee for injuries sustained in the course of employment as the result of the latter's negligence where such employees and their employer are subject to the workmen's compensation act. And a plaintiff is precluded from joining his fellow employee as a defendant, as well as from proceeding against him independently for any damages suffered by plaintiff as a result of an accident arising out of the employment. Hamblen v. Santa Fe Trail Transp. Co., 101 F. Supp. 799 (D. Colo. 1951 ).   The term “third person” applies to anyone not immune to suit under the compensation act and incurring a common-law liability for injury to a workman. Indus. Comm'n v. Standard Ins. Co., 149 Colo. 587 , 370 P.2d 156 (1962); Cont'l Sales Corp. v. Stookesberry, 170 Colo. 16 , 459 P.2d 566 (1969).   Uninsured motorist carrier's liability to insured contractual. Although it is based upon the contingency of a third party's tort liability, the uninsured motorist carrier's liability to an insured is contractual, and the state compensation insurance fund does not become a third-party beneficiary under the insurance contract. State Comp. Ins. Fund v. Gulf Ins. Co., 628 P.2d 182 (Colo. App. 1981); State Comp. Ins. Fund v. Commercial Union Ins. Co., 631 P.2d 1168 (Colo. App. 1981).   Uninsured motorist carrier is not third-party tortfeasor within the purview of this section. State Comp. Ins. Fund v. Commercial Union Ins. Co., 631 P.2d 1168 (Colo. App. 1981).   Subcontractor may be sued by an employee of a general contractor. Frohlick Crane Serv., Inc. v. Mack, 182 Colo. 34 , 510 P.2d 891 (1973).   Employee of subcontractor may maintain common-law action against general contractor. An employee of a subcontractor who has elected to receive workmen's compensation benefits from his insured subcontractor may maintain a common-law negligence action against the general contractor for the injuries received in the course of his employment. Thomas v. Farnsworth Chambers Co., 286 F.2d 270 (10th Cir.), rev'g 183 F. Supp. 764 (D. Colo. 1960 ); Whiting v. Farnsworth & Chambers Co., 293 F.2d 45 (10th Cir. 1961).   Because a general contractor may be liable as a third-party tortfeasor to these injured and compensated employees of a subcontractor. Thomas v. Farnsworth Chambers Co., 286 F.2d 270 (10th Cir.), rev'g 183 F. Supp. 764 (D. Colo. 1960 ); Whiting v. Farnsworth & Chambers Co., 293 F.2d 45 (10th Cir. 1961).   And “loaned employee” may maintain negligence action against borrowing employer. A “loaned employee” and an “employee” under workmen's compensation are not the same, and no provision prohibits or limits a “loaned employee” from maintaining a negligence action against the borrowing employer. Cont'l Sales Corp. v. Stookesberry, 170 Colo. 16 , 459 P.2d 566 (1969).   For workmen's compensation does not immunize borrowing employer. The defendant, even though it might have had workmen's compensation insurance coverage, is a “third party” and therefore subject to this common law action for negligence. The workmen's compensation act does not immunize the borrowing employer because the loaning employer is solely responsible for workmen's compensation coverage, unless it is shown that the loaning constitutes a new contract of hire between the employee and the borrowing employer. Cont'l Sales Corp. v. Stookesberry, 170 Colo. 16 , 459 P.2d 566 (1969).   Also, a physician incurring liability to an employee for negligent treatment of an injury is a “third person” under this section. Indus. Comm'n v. Standard Ins. Co., 149 Colo. 587 , 370 P.2d 156 (1962).   So that a disability is compensable which results from the negligent treatment by a physician furnished as required by the employer. Indus. Comm'n v. Standard Ins. Co., 149 Colo. 587 , 370 P.2d 156 (1962).   Doctor hired by a company to treat its employees is not a coemployee exempted from suit by § 8-43-104 for injuries caused in treatment, but may be sued in a malpractice action under this section. Wright v. District Court, 661 P.2d 1167 (Colo. 1983).   Clearly this section is not designed to relieve a third party from the consequences of injuries to another negligently inflicted. Riss & Co. v. Anderson, 108 Colo. 78 , 114 P.2d 278 (1941); Kirkham v. Hickerson Bros. Truck Co., 29 Colo. App. 303, 485 P.2d 513 (1971).   Workmen's compensation act is not to shield third-party tortfeasors from liability for damages resulting from their negligence. Frohlick Crane Serv., Inc. v. Mack, 182 Colo. 34 , 510 P.2d 891 (1973).   Termination of death benefits held proper. The propriety of termination of death benefits where the dependents of deceased elect to take compensation under articles 40 to 54 but nevertheless pursue their remedy against a third-party tortfeasor is implicit in this section. Berry Constr., Inc. v. Indus. Comm'n, 39 Colo. App. 251, 567 P.2d 806 (1977).   Substantial evidence of causation is not restricted to credible medical testimony. Savio House v. Dennis, 665 P.2d 141 (Colo. App. 1983).   Person responsible for enforcing this section is director of division of labor. General powers given to director of division of labor place him in a fiduciary role to funds such as the subsequent injury fund which are not legal entities, and therefore the director is the proper party to represent the fund and to protect its interests in workmen's compensation proceedings. Sears, Roebuck & Co. v. Baca, 682 P.2d 11 (Colo. 1984).   All workers in service of the state are treated as state “employees”, not as employees of separate entities, for purposes of workers' compensation benefits. Rodriguez v. Bd. of Dirs., 917 P.2d 358 (Colo. App. 1996).   The clear and unambiguous language of subsection (1) allows the workers' compensation carrier to seek reimbursement of its partial permanent disability payments from the third party tortfeasor. Business Ins. Co. v. BFI Waste Sys., 23 P.3d 1261 (Colo. App. 2001).   Applied in Ogden v. McChesney, 41 Colo. App. 191, 584 P.2d 636 (1978); State Comp. Ins. Fund v. City of Colo. Springs, 43 Colo. App. 112, 602 P.2d 881 (1979).   II. ELECTION.   The provision of this section for election in advance of suit is for the benefit of the state in the administration of the state compensation insurance fund, and not for the benefit of the third person. King v. O.P. Baur Confectionery Co., 100 Colo. 528 , 68 P.2d 909 (1937).   Signing of wage history does not constitute an election. The signing of a wage history by employee cannot be construed as constituting the filing of a claim for compensation nor be considered the written election contemplated by this section itself. King v. O.P. Baur Confectionery Co., 100 Colo. 528 , 68 P.2d 909 (1937).   Neither does the mere acceptance of medical, surgical, or hospital aid by the employee constitute an election to take compensation. King v. O.P. Baur Confectionery Co., 100 Colo. 528 , 68 P.2d 909 (1937).   For right of election contemplates opportunity for deliberation followed by affirmative act. The right of election insured to an injured employee who may have a cause of action in tort against a third party undoubtedly contemplates the opportunity for deliberation followed by some affirmative action on his part before he can be said to have elected to take compensation. King v. O.P. Baur Confectionery Co., 100 Colo. 528 , 68 P.2d 909 (1937).   Filing of claim and consequent notice to employer constituted election to seek compensation. Lantern Inn v. Indus. Comm'n, 624 P.2d 929 (Colo. App. 1981).   No election of remedies. Although decedent's wife had no legal cause of action against the subcontractor in whose employ the deceased was at the time of injury, the bringing of an action under such circumstances did not constitute an election of remedies, and claimant is not estopped by reason thereof from recovering compensation. Hartford Accident & Indem. Co. v. Clifton, 117 Colo. 547 , 190 P.2d 909 (1948).   Action by employee against third party is not precluded by receipt of payments. Where no award of compensation has been made, an action by the injured employee against a third party is not precluded by the receipt of payments from the employer or the insurance carrier. King v. O.P. Baur Confectionery Co., 100 Colo. 528 , 68 P.2d 909 (1937); Riss & Co. v. Anderson, 108 Colo. 78 , 114 P.2d 278 (1941); Riss & Co. v. Galloway, 108 Colo. 93 , 114 P.2d 550 (1941); Liberty Mut. Ins. Co. v. Indus. Comm'n, 145 Colo. 369 , 359 P.2d 4 (1961).   Likewise, action against third person does not bar workmen's compensation claim. In accepting compensation from his employer for injuries received in the course of his employment, and thereafter commencing an action against third persons alleged to be responsible for his injuries and settling his claim against such persons without consent of the compensation insurance carrier does not bar a claimant from pursuing his claim for workmen's compensation. Liberty Mut. Ins. Co. v. Indus. Comm'n, 145 Colo. 369 , 359 P.2d 4 (1961); State Comp. Ins. Fund v. Foulds, 167 Colo. 123 , 445 P.2d 716 (1968); Cent. Elec. Supply Co. v. Indus. Comm'n, 698 P.2d 830 (Colo. App. 1984).   An employee who suffers a compensable injury at the hands of a third party may pursue his remedies against the third person even though the employee has filed a claim under the workers' compensation act. Matter of Death of Peterkin, 729 P.2d 977 (Colo. 1986).   If the third-party suit is successful, the employer's insurance carrier may suspend all future benefits to the employee if the amount of the third-party recovery that is actually collected equals or exceeds the compensation award. Matter of Death of Peterkin, 729 P.2d 977 (Colo. 1986).   An injured employee does not lose or waive his right of action against a third party by exercising his rights under a workmen's compensation act. Krueger v. Merriman Elec., 29 Colo. App. 492, 488 P.2d 228 (1971).   For this section only limits an employee's right to retain so much of the recovery as may exceed the compensation paid to him or for which his employer or the employer's insurance carrier is liable. Since the statute by its terms limits the carrier's recovery to the amount of compensation for which it is liable, if the carrier sues alone the recoverable damages are limited to that compensation. Thus, if the employee by electing to accept compensation has lost all rights in the cause of action, then the third-party tortfeasor would be relieved of liability beyond the amount of compensation paid; it is clear that this is not the purpose of the statute. Riss & Co. v. Anderson, 108 Colo. 78 , 114 P.2d 278 (1941); Wilson v. Smith, 110 Colo. 68 , 130 P.2d 1053 (1942); Drake v. Hodges, 114 Colo. 10 , 161 P.2d 338 (1945); Kirkham v. Hickerson Bros. Truck Co., 29 Colo. App. 303, 485 P.2d 513 (1971); Krueger v. Merriman Elec., 29 Colo. App. 492, 488 P.2d 228 (1971).   Where the provisions of the workmen's compensation act do not expressly limit the employee with respect to other remedies, the supreme court is not disposed to read or interpret such limitations into the workmen's compensation statutes. Cont'l Sales Corp. v. Stookesberry, 170 Colo. 16 , 459 P.2d 566 (1969).   Employee may bring action for property damage, pain and suffering, and lost wages. The compensation provided for by the statute does not include payment for property damage, for pain and suffering, nor for all loss of future wages and the like. The right to bring an action against a third-party tortfeasor who is not a co-employee for these damages remains in the employee. Pursuant to the statute, he must repay the carrier out of his recovery for the compensation paid by it, but all amounts in excess thereof belong to him. Kirkham v. Hickerson Bros. Truck Co., 29 Colo. App. 303, 485 P.2d 513 (1971).   Filing of written election with director held not to bar action against defendant. In an action for damages for personal injuries resulting from a collision of plaintiff's automobile with a railway train owned and operated by defendant company, it was held that where plaintiff filed a written election to avail himself of the benefits of the workmen's compensation act, plaintiff was not “forever barred from asserting his alleged cause of action against this defendant”. Donley v. Denver & Salt Lake R.R., 111 Colo. 358 , 141 P.2d 899 (1943).   No question of estoppel between employee and third party. Whatever may be the situation as between the employee and his employer and the insurance carrier, no question of estoppel arises as between the employee and the third party defendant. King v. O.P. Baur Confectionery Co., 100 Colo. 528 , 68 P.2d 909 (1937).   Amount received under benefit plan should not be considered in employee's action against third party. The amount received by an employee under a so-called benefit plan, considered as self-insurance under this act, should not be considered in mitigation of damages in an action by employee against third party. Riss & Co. v. Anderson, 108 Colo. 78 , 114 P.2d 278 (1941).   III. ASSIGNMENT AND SUBROGATION.    Law reviews. For article, “A Primer on Workers' Compensation Subrogation”, see 21 Colo. Law. 1931 (1992).   The legislative intent underlying this section is to preclude double recoveries; thus, if the claimant cannot enforce a judgment or settlement agreement in his favor, there is no double recovery in the first instance. Rocky Mtn. Gen. v. Simon, 827 P.2d 629 (Colo. App. 1992).   Purpose of this provision is to adjust rights between the insurer and the employee by requiring that the insurer be reimbursed out of the employee's recovery against the third-party tortfeasor for worker's compensation benefits paid by the insurer, leaving the employee with the excess. Cont'l Cas. Co. v. Gate City Steel, 650 P.2d 1336 (Colo. App. 1982); Rocky Mtn. Gen. v. Simon, 827 P.2d 629 (Colo. App. 1992); Jordan v. Fonken & Stevens, P.C., 914 P.2d 394 (Colo. App. 1995); Andrews v. Indus. Claim Appeals Office, 952 P.2d 853 (Colo. App. 1997).   The subrogation provisions of this section have the effect of preventing an injured employee from receiving a duplicate recovery since the governmental interest in preventing double recovery is significant and is generally held to override a literal or technical interpretation of statutes or insurance policies. Rocky Mtn. Gen. v. Simon, 827 P.2d 629 (Colo. App. 1992).   Interpreting this section to restrict an employer's or carrier's subrogation interest to proceeds paid to worker individually would create an incentive for employees to circumvent this section by simply agreeing with tortfeasors that settlement proceeds would be paid to an individual or legal entity other than the employee, would defeat the public policy against double recoveries, and would render the subrogation provisions meaningless. Rocky Mtn. Gen. v. Simon, 827 P.2d 629 (Colo. App. 1992).   Being the more specific statute, the plain terms of this section control over § 5-12-102 and, therefore, insurer is limited under subrogation agreement for workers' compensation to recover only the amount which it paid to the injured employee and cannot collect any interest on amount. Husson v. Meeker, 812 P.2d 731 (Colo. App. 1991).   The phrase “actually collected” under this section refers to monetary proceeds actually received, and therefore, insurance carrier could not claim credit for future annuity payments from third-party tortfeasor not yet paid into claimant's trust. Rocky Mtn. Gen. v. Simon, 827 P.2d 629 (Colo. App. 1992).   “Assignment” of the “cause of action” under subsection (1) is only a partial one. It extends only to that part of the claim for economic damages that the carrier has paid; the carrier has no interest in any part of the claim for non-economic damages, nor in that proportion of the claimant's economic damages that the carrier has not paid. Sneath v. Express Messenger Serv., 931 P.2d 565 (Colo. App. 1996); Chavez v. Kelley Trucking, Inc., 275 P.3d 737 (Colo. App. 2011).   Insurance carrier's subrogation rights are limited to the amount of compensation benefits for which said carrier is liable, rather than to the amount of the entire net recovery an employee collects when the employee elects to pursue a remedy against a third party. Thus, the insurer is only subrogated to the claimant's rights to recover economic damages. Colo. Comp. Ins. Auth. v. Jorgensen, 992 P.2d 1156 (Colo. 2000).   Insurance carrier is not entitled to a credit or offset for interest earned on an annuity or for returns on the investment of lump-sum settlements received by claimant. Hertz Corp. v. Indus. Claim Appeals Office, 2012 COA 155 , 296 P.3d 338.   Claimant was not required to obtain workers' compensation insurer's approval before settling his claim against the employer for noneconomic damages. Chavez v. Kelley Trucking, Inc., 275 P.3d 737 (Colo. App. 2011).   Subrogation would be meaningless if the limit of liability fluctuated with every recovery. Weaver-Beatty Motor Co. v. Billen, 36 Colo. App. 442, 541 P.2d 120 (1975).   Insurer's right to recovery limited to damages obtainable through subrogation. Since insured's recovery was limited by insured's comparative negligence, insurer's recovery should also be limited and insurer is not therefore entitled to offset of its reduction through reimbursement by insured. Martinez v. St. Joseph Hosp. & Nursing Home, 878 P.2d 13 (Colo. App. 1993).   Subrogation has no effect on limits of liability. The right of subrogation granted to the state fund under this section is a separate and distinct right which has no effect on the limits of liability under § 8-49-101 established by the general assembly. Weaver-Beatty Motor Co. v. Billen, 36 Colo. App. 442, 541 P.2d 120 (1975).   This section does not create a new cause of action but merely permits the assignment of claimant's original claim. Such claims are not original claims either for or against the state, but the private claims of individuals assigned to the compensation fund for subrogation purposes. Jackson v. Bates, 133 Colo. 248 , 293 P.2d 962 (1956).   Distinction between assignment and subrogation. Assignment and subrogation are not one and the same. Assignment is distinguished from subrogation in that subrogation is an act of the law predicated on payment of the debt or claim, and operates only to secure contribution and indemnity, whereas assignment is an act of the parties depending generally on intention, and contemplates a continuation of and transfers the whole claim or debt. Kirkham v. Hickerson Bros. Truck Co., 29 Colo. App. 303, 485 P.2d 513 (1971).   In the absence of specific statutory authorization, there is no right to subrogation. Pisicchio v. Dir. of Div. of Labor & Emp., 29 Colo. App. 538, 487 P.2d 382 (1971).   This section creates no immediate and outright assignment of any part of an injured employee's cause of action against a negligent tortfeasor. The statute instead creates several interrelated alternatives from which an injured employee and the employer's workers' compensation insurer may choose. These include the insurer being subrogated to the employee's right to bring suit against the negligent tortfeasor, to the extent of workers' compensation benefits paid. Harms v. Williamson, 956 P.2d 649 (Colo. App. 1998).   No matter which alternative is chosen, the insurer is not required to file a notice of claim separate from and in addition to a sufficient notice of claim filed by the injured employee. Harms v. Williamson, 956 P.2d 649 (Colo. App. 1998).   The event which operates as a matter of law to assign the claim against the tortfeasors is the awarding of compensation. Liberty Mut. Ins. Co. v. Indus. Comm'n, 145 Colo. 369 , 359 P.2d 4 (1961); Central Elec. Supply Co. v. Indus. Comm'n, 698 P.2d 830 (Colo. App. 1984).   Act of statistician held not to be an “awarding of compensation”. The act of a statistician in approving the admission of liability, which was accompanied by the wage history signed by the plaintiff, held not to amount to an “awarding of compensation” as contemplated by this section. King v. O.P. Baur Confectionery Co., 100 Colo. 528 , 68 P.2d 909 (1937).   This section expressly limits the rights of an insurance carrier to those of a subrogee and indemnifies it only to the extent of the compensation for which it is liable as defined in the act. Kirkham v. Hickerson Bros. Truck Co., 29 Colo. App. 303, 485 P.2d 513 (1971).   In order to protect subrogee, employee may not settle claim without consent of carrier. The employee is prohibited by the statute from settling his claim against the third party for less than the compensation due without the consent of the carrier. No other limitations are imposed on the employee by the statute, and this being so, the courts cannot insert them. Kirkham v. Hickerson Bros. Truck Co., 29 Colo. App. 303, 485 P.2d 513 (1971).   But where no award has been made, the “effective force” required to give rise to subrogation rights, and the right of the carrier to give its consent to a settlement, is absent. Under these circumstances the carrier must be content with the provision of the statute which gives him full credit for the amount received by the claimant in the settlement of the civil action. Liberty Mut. Ins. Co. v. Indus. Comm'n, 145 Colo. 369 , 359 P.2d 4 (1961).   Carrier, however, may settle without consent of employee. The insurance carrier's rights in the action are limited to its share of the recovery as set forth in the act. If it desires to settle as to its rights it may do so with or without the consent of the employee. Kirkham v. Hickerson Bros. Truck Co., 29 Colo. App. 303, 485 P.2d 513 (1971).   But the insurance carrier may not compel the employee to abandon or compromise his cause of action. Kirkham v. Hickerson Bros. Truck Co., 29 Colo. App. 303, 485 P.2d 513 (1971).   For the only limitations on the employee's right of action are those imposed by the act itself. By forcing him to accept an unsatisfactory settlement, he was subjected to an unwarranted limitation on his right to prosecute his action against the alleged tortfeasor. This would defeat the primary purpose of this section of the act which is to provide the mechanics that will achieve the result of the third party paying what he would normally pay if no compensation question were involved; the employer and carrier “coming out even” by being reimbursed for their compensation expenditure; and the employee getting any excess of the damage recovery over compensation. Kirkham v. Hickerson Bros. Truck Co., 29 Colo. App. 303, 485 P.2d 513 (1971).   Rights acquired by subrogation are assignable. The assignment of subrogation rights by an insurance company to the injured party is valid and simply avoids circuitous procedure. There is nothing in the statute which prohibits the director from following procedures available to private insurers in this regard. Krueger v. Merriman Elec., Colo., 29 Colo. App. 429, 488 P.2d 228 (1971).   Prior to 1959, insurer's right to subrogation did not extend to benefits such as hospital, medical, and surgical expenses. Jacobson v. Doan, 136 Colo. 496 , 319 P.2d 975 (1957); Publix Cab Co. v. Colo. Nat'l Bank, 139 Colo. 205 , 338 P.2d 702, 78 A.L.R.2d 198 (1959).   But now the employer and insurer are entitled to be subrogated to the rights of the employee in his malpractice action against the negligent physician. However, the employee can recover from the doctor only such damages as flow from the doctor's negligence. Indus. Comm'n v. Standard Ins. Co., 149 Colo. 587 , 370 P.2d 156 (1962).   And accordingly, the insurer is subrogated only to the extent of the compensation he is required to pay for aggravation of an original injury by the doctor. Indus. Comm'n v. Standard Ins. Co., 149 Colo. 587 , 370 P.2d 156 (1962).   The general assembly, prior to the amendment of this section in 2003, did not intend to include physical impairment or disfigurement damages recovered by an employee within the general category of economic damages subject to the insurer's right of subrogation. Colo. Comp. Ins. Auth. v. Jones, 131 P.3d 1074 (Colo. App. 2005).   When insurer entitled to reimbursement from employee without proof of negligence. Where an employee receives worker's compensation benefits and then recovers from a third-party tortfeasor pursuant to a settlement agreement which resolves all claims between the two parties, the insurer is entitled to its reimbursement from the employee without proof of the third party's negligence. Cont'l Cas. Co. v. Gate City Steel, 650 P.2d 1336 (Colo. App. 1982).   And when insurer entitled to reimbursement directly from tortfeasor. Where the third-party tortfeasor pays the employee pursuant to a general settlement of all claims between them, with notice of the insurer's subrogation rights, and agrees to indemnify the employee for any amounts he is required to pay the insurer in satisfaction of the insurer's reimbursement and subrogation rights, the third-party tortfeasor, rather than the employee, may be held directly liable for reimbursement to the insurer without proof of negligence. Cont'l Cas. Co. v. Gate City Steel, 650 P.2d 1336 (Colo. App. 1982).   If a claimant recovers from the tortfeasor, the claimant must reimburse the insurer for any benefits paid, and then the insurer may also offset any portion of the recovery not used to reimburse the insurer for past benefit payments against any future benefits the insurer may have to pay. Thus, the claimant receives interim workers' compensation benefits, recovers from the tortfeasor, reimburses the insurer for the interim benefits, credits the insurer for potential future benefits, and keeps the remainder as excess. Jorgensen v. Colo. Comp. Ins. Auth., 967 P.2d 172 (Colo. App. 1998), aff'd on other grounds, 992 P.2d 1156 (Colo. 2000).   Limit on reimbursement of employer's insurance carrier after recovery from third party. An injured employee who recovers damages from a third-party tortfeasor must reimburse his employer's workmen's compensation insurance carrier for benefits paid to him, but any damages recovered in excess of the compensation paid by the carrier belong to the employee. State Comp. Ins. Fund v. Commercial Union Ins. Co., 631 P.2d 1168 (Colo. App. 1981).   Amount of subrogation may not be reduced to pay attorney fees. Where there is no written consent from the party liable for compensation payments, the successful claimant in the third-party suit may not reduce the amount of the subrogation required by subsection (1) by unilaterally entering into a compromise agreement the ultimate result of which is to pay a portion of the recovery to counsel as attorney fees incurred in the third-party action. In re Peterkin, 698 P.2d 1353 (Colo. App. 1985), aff'd, 729 P.2d 977 (Colo. 1986).   Claimant permitted to reduce insurance carrier's subrogation credit by the amount of attorney fees and costs incurred in settling the third-party action where there was no deficiency between the settlement and the amount of compensation for which the insurer was liable. When there is no such deficiency the reduction cannot be disallowed based on insurer's argument that it did not give written approval for the settlement. Further, to disallow the reduction would result in the insurer's unjust enrichment. Kennedy v. Indus. Comm'n, 735 P.2d 891 (Colo. App. 1986).   Workers' compensation insurer was not entitled to take subrogation credit, against additional compensation benefits to be paid claimant for her permanent disability, for amount of gross settlement with tortfeasor which represented claimant's attorney fees and expenses. Drake v. Ins. Co. of N. Am., 736 P.2d 1244 (Colo. App. 1986).   Where an injured employee's tort claim against a third party is settled for an amount greater than the insurer's subrogation claim for workers' compensation benefits, and the insurer has not actively participated in the tort litigation, a court may order the insurer to pay a reasonable share of the attorney fees and court costs incurred by the employee in the tort litigation. County Workers Comp. Pool v. Davis, 817 P.2d 521 (Colo. 1991).   Insurer may not be subrogated to liability arising from accident subsequent to industrial accident. There is no authority to award subrogation to an insurance company where tortfeasor liability arises from an accident subsequent to and unconnected with the industrial accident for which workmen's compensation was sought and where the latter, nonindustrial accident aggravated the disability caused by the original industrial accident. Pisicchio v. Dir. of Div. of Labor & Emp., 29 Colo. App. 538, 487 P.2d 382 (1971).   Insurer may not credit claimant's settlement against worker's compensation claim for damages covered by personal injury protection (PIP) benefits. Tate v. Indus. Claim Appeals Office, 815 P.2d 15 (Colo. 1991).   No subrogation rights over a claimant's third-party settlement acquired by a worker's compensation insurer where insurer had paid no benefits to claimant at the time of third-party settlement, and the insurer has no control over claimant's third-party settlement. Brickell v. Business Machs., Inc., 817 P.2d 536 (Colo. App. 1990).   Workers' compensation carrier is barred from asserting subrogation claim against tortfeasor when injured employee is eligible for PIP benefits. County Workers Comp. Pool v. Folk, 895 P.2d 1083 (Colo. App. 1994).   Employee may be joined in employer's action against third party. In an action for damages by an employer or insurance carrier against a third party under this section, the employee may be joined as a proper, although not a necessary, party plaintiff. Wilson v. Smith, 110 Colo. 68 , 130 P.2d 1053 (1942); Kirkham v. Hickerson Bros. Truck Co., 29 Colo. App. 303, 485 P.2d 513 (1971); Moore v. Fischer, 31 Colo. App. 425, 505, P.2d 383 (1972).   In the event of a recovery from a third party defendant for a wrong alleged, from the sum awarded the amount of compensation for which the state fund is liable under the act shall be returned to the fund and the balance, if any, goes to a statutory assignee. Jacobson v. Doan, 136 Colo. 496 , 319 P.2d 975 (1957).   The employer or carrier is entitled to subrogation credit for the amount of the monetary recovery when a third-party action results in a monetary recovery for work-related injuries, irrespective of whether the money is paid to the claimant directly or to an individual or legal entity designated to receive the proceeds. Rocky Mtn. Gen. v. Simon, 827 P.2d 629 (Colo. App. 1992).   Insurer can only settle an action against a third party in the amount of compensation already paid to the claimant. Thus, by settling, the insurer does not waive its statutory right to offset claimant's third-party recovery against the insurer's payment of future compensation benefits. Metcalfe v. Bruning Div. of AMI, 868 P.2d 1145 (Colo. App. 1993); Jordan v. Fonken & Stevens, P.C., 914 P.2d 394 (Colo. App. 1995); Andrews v. Indus. Claim Appeals Office, 952 P.2d 853 (Colo. App. 1997).   This section specifically provides that the subsequent injury fund has subrogation rights with respect to third-party settlement proceeds. Metcalfe v. Bruning Div. of AMI, 868 P.2d 1145 (Colo. App. 1993).   An insurance carrier becomes subrogated to the rights of the injured employee against any third-party tortfeasor to the extent of benefits paid. This right extends to the settlement proceeds of a compromised claim. However, if the settlement is to be paid to the spouse of the injured employee for lack of consortium, such subrogation claim depends on whether the settlement agreement was fair and entered not in good faith and not designed to defeat such subrogation claim. Rains v. Kolberg Mfg. Corp., 897 P.2d 845 (Colo. App. 1994).   Claimant cannot unilaterally characterize recovery as being only for pain and suffering and thus defeat the insurance carrier's subrogation rights. Regardless of the label applied to the recovery, the carrier is entitled to exercise its subrogation rights against the amount of recovery actually collected. Kennedy v. Indus. Comm'n, 735 P.2d 891 (Colo. App. 1986).   Subrogee's statutory subrogation lien applies to and may be satisfied from the total settlement amount recovered, which was undifferentiated between two accidents, even though the assignment agreement made no express reference to the second accident. United Fire & Cas. Co. v. Armantrout, 904 P.2d 1375 (Colo. App. 1995).   District court has jurisdiction to apportion a settlement reached in a tort case when a worker's compensation case underlies the tort case, because the court is only determining the portion of the settlement that represents the non-economic losses. While that apportionment will indirectly affect the workers' compensation case by limiting the amount of proceeds subject to the subrogation interest, it is a proper exercise of the court's authority. Jorgensen v. Colo. Comp. Ins. Auth., 967 P.2d 172 (Colo. App. 1998), aff'd, 992 P.2d 1156 (Colo. 2000).   Since the carrier's subrogation right attaches only to the claimant's economic loss, the court shall determine actual amount of claimant's economic and non-economic damages and apportion settlement proceeds accordingly. Failure to apportion settlement proceeds is reversible error even when the settlement is substantially lower than the actual damages. Reliance Ins. Co. v. Blackford, 100 P.3d 578 (Colo. App. 2004); Colo. Comp. Ins. Auth. v. Jones, 131 P.3d 1074 (Colo. App. 2005).   Uninsured/underinsured motorist (UM/UIM) insurer not a third-party tortfeasor within purview of section and does not step into shoes of tortfeasor; therefore, a worker's compensation insurer does not have subrogation rights against UM/UIM insurance benefits paid to injured worker. Colo. Ins. Guar. Ass'n v. Menor, 166 P.3d 205 (Colo. App. 2007).   While Colorado insurance guaranty association (CIGA), acting as worker's compensation insurer, does not have subrogation rights against UM/UIM insurance benefits under this section, CIGA has claim for relief for nonduplication of recovery under its enabling statute. Colo. Ins. Guar. Ass'n v. Menor, 166 P.3d 205 (Colo. App. 2007).