2023 Oregon Revised Statutes › Volume : 16 - Trade Practices, Labor and Employment › Chapter 656 - Workers’ Compensation › Section 656.593 - Procedure when worker or beneficiary elects to bring action; release of liability and lien of paying agency in certain cases.

(1) If a worker or the beneficiaries of the worker elect to recover damages from an employer or third person, the worker or beneficiaries shall give notice of the election to the paying agency by personal service or by registered or certified mail. The paying agency likewise must be given notice of the name of the court in which the action is brought, and a return showing service of the notice on the paying agency must be filed with the clerk of the court but is not a part of the record except to give notice to the defendant of the lien of the paying agency, as provided in this section. The proceeds of any damages the worker or beneficiaries recover from an employer or third person are subject to a lien of the paying agency for the paying agency’s share of the proceeds as set forth in this section. If the proceeds are paid in a series of payments, each payment must be distributed proportionately to each recipient according to the formula provided in this section, unless the parties otherwise agree. The total proceeds must be distributed as follows:
(a) Costs and attorney fees incurred must be paid, and the attorney fees may not exceed the advisory schedule of fees established by the Workers’ Compensation Board for such actions.
(b) The worker or the beneficiaries of the worker must receive at least 33-1/3 percent of the balance of the recovery.
(c) The paying agency must be paid and retain the balance of the recovery, but only to the extent that the paying agency is compensated for the paying agency’s expenditures for compensation, first aid or other medical, surgical or hospital service, and for the present value of reasonably expected future expenditures the paying agency makes for compensation and other costs of the worker’s claim under this chapter. Other costs include expenditures that the Department of Consumer and Business Services makes from the Consumer and Business Services Fund, the Self-Insured Employer Adjustment Reserve, the Self-Insured Employer Group Adjustment Reserve and the Workers’ Benefit Fund to reimburse the costs of the paying agency. Other costs also include assessments for the Workers’ Benefit Fund and any compensation that may become payable under ORS 656.273 or 656.278.
(d) The balance of the recovery must be paid to the worker or the beneficiaries of the worker forthwith. The board shall resolve any conflict as to the amount of the balance that the paying agency may retain.
(2) The amount the worker or the beneficiaries of the worker retain must be in addition to the compensation or other benefits to which the worker or beneficiaries are entitled under this chapter.
(3) A claimant may settle any third party case with the approval of the paying agency, in which event the paying agency may accept a share of the proceeds that is just and proper and the worker or the beneficiaries of the worker must receive the amount to which the worker would be entitled for a recovery under subsections (1) and (2) of this section. The board shall resolve any conflict as to what may be a just and proper distribution.
(4) As used in this section, "paying agency" includes the Department of Consumer and Business Services with respect to expenditures from the Consumer and Business Services Fund, the Self-Insured Employer Adjustment Reserve, the Self-Insured Employer Group Adjustment Reserve and the Workers’ Benefit Fund the department makes, together with the present value of any reasonably expected future expenditures from the funds or reserves that the department may make, to reimburse the costs of another paying agency and to compensate or pay other costs of a worker’s claim because of a self-insured employer’s or self-insured employer group’s insolvency, default or decertification.
(5) The department must be repaid for the department’s expenditures from the proceeds the paying agency recovered in an amount proportional to the amount of the department’s reimbursement of the paying agency’s costs. The department shall deposit all moneys the department receives under this section in the same fund from which the department’s expenditures originated.
(6) Before, and instead of, the distribution of proceeds described in subsection (1) of this section, if a worker or the beneficiaries of a worker are entitled to receive payment pursuant to a judgment or a settlement in a third party action in the amount of $1 million or more, the worker or the beneficiaries of the worker may elect to release the paying agency from all further liability on the workers’ compensation claim, thereby canceling the lien of the paying agency as to the present value of the paying agency’s reasonably expected future expenditures for workers’ compensation and other costs of the worker’s claim, if all of the following conditions are met as part of the claim release:
(a) The worker or the beneficiaries of the worker are represented by an attorney.
(b) The release of the claim is presented in writing and is filed with the Workers’ Compensation Board, with a copy served on the paying agency, including the Department of Consumer and Business Services with respect to the department’s expenditures from the Consumer and Business Services Fund, the Self-Insured Employer Adjustment Reserve, the Self-Insured Employer Group Adjustment Reserve and the Workers’ Benefit Fund.
(c) The claim release specifies that the worker or the beneficiaries of the worker understand that the claim release means that no further benefits of any nature whatsoever will be paid to the worker or the beneficiaries of the worker.
(d) The release of the claim is accompanied by a settlement stipulation with the paying agency, outlining terms of reimbursement to the paying agency, covering the paying agency’s incurred expenditures for compensation, first aid or other medical, surgical or hospital service and for expenditures from the Consumer and Business Services Fund, the Self-Insured Employer Adjustment Reserve, the Self-Insured Employer Group Adjustment Reserve and the Workers’ Benefit Fund to the date the release becomes final or the order of the board becomes final. If the payment of such incurred expenditures is in dispute, the release of the claim must be accompanied by a written submission of the dispute by the worker or the beneficiaries of the worker to the board for resolution of the dispute by order of the board under procedures allowing for board resolution under ORS 656.587, in which case the release of the claim is not final until such time as the order of the board becomes final. In such a case, the only issue to be decided by the board is the amount of incurred expenses by the paying agency.
(e) If a service, item or benefit has been provided but a bill for that service, item or benefit has not been received by the paying agency before the release or order becomes final, the reimbursement payment must cover the bill in accordance with the following process:
(A) The paying agency may maintain a contingency fund in an amount reasonably sufficient to cover reimbursement for the billing.
(B) If a dispute arises as to reimbursement for any bill first received by the paying agency not later than 180 days after the date the release or order became final, the dispute must be resolved by order of the board.
(C) Any amount remaining in the contingency fund after the 180-day period must be paid to the worker or the beneficiaries of the worker.
(D) Any billing for a service, item or benefit that is first received by the paying agency more than 180 days after the date the release or order became final is unenforceable by the person who issued the bill.
(f) The settlement or judgment proceeds are available for payment or actually have been paid out and are available in a trust fund or similar account, or are available through a legally enforceable structured settlement agreement if sufficient funds are available to make payment to the paying agency.
(g) The agreed-upon payment to the paying agency, or the payment to the paying agency ordered by the board, is made within 30 days of the filing of the withdrawal of the claim with the board or within 30 days after the board has entered a final order resolving any dispute with the paying agency.
(7) If a release of further liability on a claim, as provided in subsection (6) of this section, has been filed, and if payment to the paying agency has been made, the effect of the release is that the worker or the beneficiaries of the worker have no further right to seek benefits under the original claim, or any independent workers’ compensation claim regarding the same circumstances, and the claim may not be reasserted, refiled or reestablished through any legal proceeding. [Formerly 656.322; 1977 c.804 §16; 1979 c.839 §12; 1981 c.540 §1; 1985 c.600 §12; 1987 c.373 §35b; 1993 c.445 §1; 1995 c.332 §47; 1995 c.641 §8; 1997 c.639 §4; 2017 c.69 §3]