Liability of third person
HRS §386-8
in effect386-8. Liability of third person
(a) When a work injury for which compensation is payable under this chapter has been sustained under circumstances creating in some person other than the employer or another employee of the employer acting in the course of employment a legal liability to pay damages on account thereof, the injured employee or the injured employee's dependents (hereinafter referred to collectively as "the employee") may claim compensation under this chapter and recover damages from that third person.
(b) If the employee commences an action
against a third person, the employee shall without delay give the employer
written notice of the action and the name and location of the court in which
the action is brought by personal service or registered mail. The employer, at
any time before trial on the facts, may join as party plaintiff.
(c) If within nine months after the date of
the personal injury the employee has not commenced an action against a third
person, the employer, having paid or being liable for compensation under this
chapter, shall be subrogated to the rights of the injured employee. Except as
limited by chapter 657, the employee may at any time commence an action or join
in any action commenced by the employer against a third person.
(d) No release or settlement of any claim or
action under this section is valid without the written consent of both employer
and employee. The entire amount of the settlement after deductions for
attorney's fees and costs as provided in this section is subject to the
employer's right of reimbursement for the employer's compensation payments
under this chapter and the employer's expenses and costs of action.
(e) If the action is prosecuted by the
employer alone, the employer shall be entitled to be paid from the proceeds
received as a result of any judgment for damages, or settlement in case the
action is compromised before judgment, the reasonable litigation expenses
incurred in preparation and prosecution of the action, together with a
reasonable attorney's fee, which shall be based solely upon the services
rendered by the employer's attorney in effecting recovery both for the benefit
of the employer and the employee. After the payment of the expenses and
attorney's fee, the employer shall apply out of the amount of the judgment or
settlement proceeds an amount sufficient to reimburse the employer for the
amount of the employer's expenditure for compensation and shall pay any excess
to the injured employee or other person entitled thereto.
(f) If the action is prosecuted by the
employee alone, the employee shall be entitled to apply out of the amount of
the judgment for damages, or settlement in case the action is compromised
before judgment, the reasonable litigation expenses incurred in preparation and
prosecution of the action, together with a reasonable attorney's fee, which
shall be based solely upon the services rendered by the employee's attorney in
effecting recovery both for the benefit of the employee and the employer.
After the payment of the expenses and attorney's fee, there shall be applied
out of the amount of the judgment or settlement proceeds, the amount of the
employer's expenditure for compensation, less the employer's share of the
expenses and attorney's fee. On application of the employer, the court shall
allow as a first lien against the amount of the judgment for damages or
settlement proceeds, the amount of the employer's expenditure for compensation,
less the employer's share of the expenses and attorney's fee.
(g) If the action is prosecuted both by the
employee and the employer, in a single action or in consolidated actions, and
they are represented by the same agreed attorney or by separate attorneys,
there shall first be paid from any judgment for damages recovered, or
settlement proceeds in case the action or actions are settled before judgment,
the reasonable litigation expenses incurred in preparation and prosecution of
the action or actions, together with reasonable attorney's fees based solely on
the services rendered for the benefit of both parties where they are
represented by the same attorney, and where they are represented by separate
attorneys, based solely upon the service rendered in each instance by the
attorney in effecting recovery for the benefit of the party represented. After
the payment of the expenses and attorneys' fees, there shall be applied out of
the amount of the judgment for damages, or settlement proceeds an amount
sufficient to reimburse the employer for the amount of the employer's
expenditure for compensation and any excess shall be paid to the injured
employee or other person entitled thereto.
(h) If the parties are unable to agree upon
the amount of reasonable litigation expenses and the amount of attorneys' fees
under this section, the expenses and attorneys' fees shall be fixed by the
court.
(i) After reimbursement for the employer's
compensation payments, the employer shall be relieved from the obligation to
make further compensation payments to the employee under this chapter up to the
entire amount of the balance of the settlement or the judgment, if satisfied,
as the case may be, after deducting the cost and expenses, including attorneys'
fees.
(j) The amount of compensation paid by the
employer or the amount of compensation to which the injured employee is
entitled shall not be admissible in evidence in any action brought to recover
damages.
(k) Another employee of the same employer
shall not be relieved of that employee's liability as a third party, if the
personal injury is caused by that employee's wilful and wanton misconduct.
(l) If the special compensation fund has paid
or is liable for any compensation under this chapter, the fund shall be
entitled to all the rights and remedies granted an employer under this section;
provided that the employer's right to reimbursement for compensation payments
and expenses under this chapter shall have priority.
[L 1963, c 116, pt of §1;
Supp, §97-8; am L 1967, c 53, §1; HRS §386-8; am L 1969, c 13, §1; am L 1970, c
58, §1; am L 1973, c 144, §1; am L 2016, c 55, §11]
Source: Hawaii State Legislature (capitol.hawaii.gov), via Internet Archive capturesURL: http://www.capitol.hawaii.gov/hrscurrent/Vol07_Ch0346-0398/HRS0386/HRS_0386-0008.htmFetched: 11/10/2026