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48-118.04. Third-party claims; settlement; requirements.
(1) A settlement of a third-party claim under the Nebraska Workers' Compensation Act is void unless:
(a) Such settlement is agreed upon in writing by the employee or his or her personal representative and the workers' compensation insurer of the employer, if there is one, and if there is no insurer, then by the employer; or
(b) In the absence of such agreement, the court before which the action is pending determines that the settlement offer is fair and reasonable considering liability, damages, and the ability of the third person and his or her liability insurance carrier to satisfy any judgment.
(2) If the employee or his or her personal representative or the employer or his or her workers' compensation insurer do not agree in writing upon distribution of the proceeds of any judgment or settlement, the court, upon application, shall order a fair and equitable distribution of the proceeds of any judgment or settlement.
The phrase "fair and equitable distribution," as used in this section, was not intended to permit the subrogation interest of an employer or workers' compensation insurer to be subject to equitable defenses. Burns v. Nielsen, 273 Neb. 724, 732 N.W.2d 640 (2007).
The purpose of this section is to prevent a fair and reasonable settlement between an employee and third-party tort-feasor from being delayed because the parties cannot agree on how the proposed settlement should be distributed. Burns v. Nielsen, 273 Neb. 724, 732 N.W.2d 640 (2007).
This section does not authorize the district court to punish an employer beyond the penalties expressly prescribed by the workers' compensation statutes. Burns v. Nielsen, 273 Neb. 724, 732 N.W.2d 640 (2007).
This section does not adopt a "made whole" doctrine, nor does it adopt any other specific rule for making a fair and equitable distribution, but instead leaves the distribution to the court's discretion. Turco v. Schuning, 271 Neb. 770, 716 N.W.2d 415 (2006).
Statutory subrogation under this section requires a fair and equitable distribution to be determined by the trial court under the facts of each case. Sterner v. American Fam. Ins. Co., 19 Neb. App. 339, 805 N.W.2d 696 (2011).
Third-party settlements are void unless agreed to in writing by the employee, or the employee's personal representative, and the employer, or the employer's insurer. Sterner v. American Fam. Ins. Co., 19 Neb. App. 339, 805 N.W.2d 696 (2011).
This section does not require an injured worker to be "made whole" before a subrogated compensation carrier is entitled to a portion of the settlement. Sterner v. American Fam. Ins. Co., 19 Neb. App. 339, 805 N.W.2d 696 (2011).