2023 Arizona Revised Statutes › Title 23 - Labor › § 23-1023 - Liability of third person to injured employee; election of remedies

23-1023.
Liability of third person to injured employee;  election of remedies
A. If an employee who is entitled to compensation under this chapter is injured or killed or further aggravates a previously accepted industrial injury by the negligence or wrong of another person not in the same employ,  the injured employee,  or in event of death the injured employee's dependents,  may pursue the injured person's remedy against the other person.
B. If the employee who is entitled to compensation under this chapter or the employee's dependents do not pursue a remedy pursuant to this section against the other person by instituting an action within one year after the cause of action accrues,  or if after instituting the action,  the employee or the employee's dependents fail to fully prosecute the claim and the action is dismissed,  the claim against the other person is deemed assigned to the insurance carrier or self-insured employer and all of the following apply:
1. The insurance carrier or self-insured employer may institute an action against the other person.
2. Any dismissal that is entered for lack of prosecution of an action instituted by the employee or the employee's dependents shall not prejudice the right of the insurance carrier or self-insured employer to recover the amount of benefits paid.
3. If the statute of limitations of the claim is one year after the cause of action accrues,  the insurance carrier or self-insured employer may file the action prior to one year after the cause of action accrues.
4. The claim may be prosecuted or compromised by the insurance carrier or the person liable for the self-insured employer or may be reassigned in its entirety to the employee or the employee's dependents. After the reassignment,  the employee who is entitled to compensation,  or the employee's dependents,  shall have the same rights to pursue the claim as if it had been filed within the first year.
C. The employee or the employee's dependents shall provide the insurance carrier or the self-insured employer written notice of the intention to bring an action against a third party and shall provide to the insurance carrier or self-insured employer timely and periodic notice of all pleadings and rulings concerning the status of the pending action. In any action instituted by the employee or the employee's dependents,  the insurance carrier or the self-insured employer shall have the right to intervene at any time to protect the insurance carrier's or the self-insured employer's interests.
D. If the employee proceeds against the other person,  compensation and medical,  surgical and hospital benefits shall be paid as provided in this chapter and the insurance carrier or other person liable to pay the claim shall have a lien on the amount actually collectable from the other person to the extent of such compensation and medical,  surgical and hospital benefits paid. This lien shall not be subject to a collection fee. The amount actually collectable shall be the total recovery less the reasonable and necessary expenses,  including attorney fees,  actually expended in securing the recovery. In any action arising out of an aggravation of a previously accepted industrial injury,  the lien shall only apply to amounts expended for compensation and treatment of the aggravation. The insurance carrier or person shall contribute only the deficiency between the amount actually collected and the compensation and medical,  surgical and hospital benefits provided or estimated by this chapter for the case. Compromise of any claim by the employee or the employee's dependents at an amount less than the compensation and medical,  surgical and hospital benefits provided for shall be made only with written approval of the insurance carrier or self-insured employer liable to pay the claim.
E. For purposes of this section,  the commission shall have the same rights as an insurance carrier or self-insured employer.