Stakeholders back bill to set formula for third‑party recoveries in workers’ compensation cases after Nevada court defers to legislature

Senate Bill 258, which revises provisions related to industrial insurance (workers' compensation), received a broadly supported hearing in the Assembly Commerce and Labor Committee where the sponsor and multiple stakeholder groups described the measure as a negotiated fix to uncertainty created by a recent Nevada Supreme Court decision.

Problem and history: Lisonbee Brazier, testifying for the Nevada Justice Association, explained the issue: when an employee is injured on the job and a third party is at fault (for example, a driver who hits a police officer at the roadside), the worker’s compensation carrier may pay benefits while the injured worker pursues a tort claim against that third party. The question is how much of any tort recovery should go to the carrier to reimburse the benefits it paid. Brazier said Nevada courts had used a multi‑factor formula derived from a 1986 decision known in the hearing as Breen, but that the Nevada Supreme Court’s recent Vasquez decision told the parties this is a legislative question and declined to apply a single uniform rule.

What SB 258 does: Jason Mills, who explained the bill’s text, said the statute creates a predictable allocation: if a third‑party recovery is insufficient to fully reimburse the industrial insurer, the insurer may recover up to one‑third of the claimant’s tort recovery. The bill provides that the parties equally share litigation costs of the recovery (procurement costs), subject to judicial review if costs are disputed. The bill also addresses future reopening and offsets so that if a workers’ comp claim later reopens, indemnity and medical benefits would be reduced by one‑third until the claimant’s net tort recovery has been offset.

Support from broad stakeholders: Representatives from labor (Laborers Local 169, Teamsters local), employers (Nevada Resort Association, Nevada Trucking Association, franchise auto dealers), self‑insured groups and insurer managers (ProGroup, Nevada Self Insured Association, Nevada Alternative Solutions) testified in support, thanking the bill sponsor, Senator Rochelle Winn, and noting the bill was the product of stakeholder negotiations. Supporters said the bill replaces legal uncertainty with predictability for injured workers, employers and insurers.

Opposition and neutrality: No organized opposition callers were recorded during the hearing. Several stakeholder groups and insurers framed testimony as support or neutral technical input, and the sponsor closed the hearing with the committee’s appreciation for the consensus‑driven drafting.

Next steps: The committee heard support testimony and no opposition during the meeting; no committee vote was recorded at this hearing.