AN ACT RELATING TO LABOR AND LABOR RELATIONS -- WORKERS' COMPENSATION -- PROCEDURE (Amends the workers' compensation reimbursement provisions related to the liability of third person for damages.)

S2739

2026 -- S 2739
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LC005721
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STATE OF RHODE ISLAND
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2026
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A N A C T
RELATING TO LABOR AND LABOR RELATIONS -- WORKERS' COMPENSATION --
PROCEDURE

Introduced By:
Senators Famiglietti, Dimitri, Euer, McKenney, Zurier, Bissaillon,
Thompson, Bell, Raptakis, and Burke

Date Introduced:
February 27, 2026

Referred To:
Senate Labor & Gaming
It is enacted by the General Assembly as follows:
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SECTION 1. Section 28-35-58 of the General Laws in Chapter 28-35 entitled "Workers’
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Compensation — Procedure" is hereby amended to read as follows:
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28-35-58. Liability of third person for damages.
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(a) Where the injury for which compensation is payable under chapters 29 — 38 of this
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title was caused under circumstances creating a legal liability in some person other than the
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employer to pay damages in respect of the injury, the employee may take proceedings, both against
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that person to recover damages and against any person liable to pay compensation under those
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chapters for that compensation, and the employee shall be entitled to receive both damages and
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compensation. The employee, in recovering damages either by judgment or settlement from the
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person so liable to pay damages, shall reimburse the person by whom the compensation was paid
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to the extent of the compensation paid as of the date of the judgment or settlement and the receipt
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of those damages by the employee shall not bar future compensation. An insurer shall be entitled
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to suspend the payment of compensation benefits payable to the employee when the damages
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recovered by judgment or settlement from the person so liable to pay damages exceeds the
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compensation paid as of the date of the judgment or settlement. The suspension period shall be the
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number of weeks that are equal to the excess damages paid divided by the employee’s weekly
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compensation rate; however, during the period of suspension the employee shall be entitled to
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receive the benefit of all medical and hospital payments on his or her behalf. If the employee has

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been paid compensation under those chapters, the person by whom the compensation was paid shall
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be entitled to indemnity from the person liable to pay damages, and to the extent of that indemnity
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shall be subrogated to the rights of the employee to recover those damages. When money has been
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recovered either by judgment or by settlement by an employee from the person liable to pay
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damages, by suit or settlement, and the employee is required to reimburse the person by whom the
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compensation was paid, the employee or his or her attorney shall be entitled to withhold from the
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amount to be reimbursed that proportion of the costs, witness expenses, and other out-of-pocket
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expenses and attorney fees which the amount which the employee is required to reimburse the
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person by whom compensation was paid bears to the amount recovered from the third party.
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(b) Any money recovered by judgment, award, or settlement that includes damages for past
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or future pain and suffering, loss of consortium, loss of society, loss of wages and/or earning
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capacity or other damages not fully compensated by workers' compensation, shall not be
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reimbursed. The amount to be reimbursed shall also be reduced by any percentage of the employee's
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comparative negligence. Any dispute regarding the appropriate apportionment of the amount to be
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reimbursed by the employee shall be heard in the court having jurisdiction of the underlying third-
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party claim.
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(b)
(c)
In any case in which the employee or, in case of death, the administrator of the
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employee’s estate neglects to exercise the employee’s right of action by failing to file a lawsuit
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against such third person within two (2) years and eight (8) months after the injury, the self-insured
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employer or the employer’s insurance carrier may so proceed and shall be subrogated to the rights
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of the injured employee or, in case of death, to the rights of the administrator to recover against
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such person; provided, that no subrogation action shall commence unless at least twenty-six (26)
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weeks prior to the expiration of the two (2) years and eight (8) months the self-insured employer
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or the employer’s insurance carrier has notified the employee, or in the case of death, the
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administrator of the employee’s estate, in writing by personal service or certified mail, that failure
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to commence such action within two (2) years and eight (8) months after the injury will operate as
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an assignment of the right of action to the self-insured employer or the employer’s insurance carrier.
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Upon filing the lawsuit, the attorney for the self-insured employer or the employer’s insurance
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carrier shall notify the employee in writing by personal service or certified mail of the action and
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the name of the court where it was filed and the employee may join as a plaintiff in the action within
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thirty (30) days after the notification, and, if the employee fails to join, the right of joinder shall
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abate. The right of the employee, or in case of death, the administrator of the employee’s estate, to
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be fully compensated for the damages sustained shall be fully preserved as outlined in subsection
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(a).

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(c)
(d)
If the self-insured employer or the employer’s insurance carrier recovers from these
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other personal damages or benefits, after expenses and costs of action have been paid, in excess of
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the amount of the lien as defined in this section, then that excess shall be paid to the injured
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employee or, in the case of death, to the administrator of the employee’s estate for distribution.
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(d)
(e)
In the event there is a dispute over the reimbursement owed or the period of
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suspension going forward, the court, by agreement of the parties and upon petition by either the
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employee or the employer and/or its insurance carrier, shall assign the dispute to the workers’
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compensation court’s mediation program, in accordance with the rules and procedures established
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by the court. Nothing herein shall preclude any party or attorney from pursuing any action
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otherwise available.
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SECTION 2. This act shall take effect upon passage.
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EXPLANATION
BY THE LEGISLATIVE COUNCIL
OF
A N A C T
RELATING TO LABOR AND LABOR RELATIONS -- WORKERS' COMPENSATION --
PROCEDURE
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This act would amend the workers' compensation reimbursement provisions related to the
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liability of third person for damages.
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This act would take effect upon passage.
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LC005721
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