Senate Judiciary Committee hears SB 258 to clarify third‑party workers' compensation recoveries

Carson City — The Nevada Senate Judiciary Committee on March 25, 2025 held a hearing on Senate Bill 258, a proposal to clarify how industrial insurers and injured workers divide proceeds when a third party causes an on‑the‑job injury.

Sponsor Rochelle Winn, presenting the bill, turned the committee to representatives of the Nevada Justice Association, who described the measure as a legislative response to recent Nevada Supreme Court decisions that left the allocation of third‑party recoveries uncertain. "They did not say those cases are wrong or that those formulas were wrong, but they said this is a question for the legislature to answer," Allison Brazier said of the court's recent guidance.

The amendment presented by the Nevada Justice Association would, in typical scenarios with limited recoveries, give an industrial insurer the right to recover the lesser of the insurer's full lien or one‑third of the total funds recovered from the third party. Jason Mills, speaking for the association, framed the change as a response to limited third‑party coverage: "If there were unlimited funds, of course, none of these statutes would be needed," he said, noting most motor‑vehicle third‑party recoveries fall at or near Nevada's minimum coverage limits. Mills also described a provision allowing an insurer to reduce future indemnity payments by up to one‑third to account for prior tort recoveries when a workers' compensation claim is later reopened.

The amendment includes three elements the presenters emphasized: (1) a one‑third cap on insurer recovery where total third‑party proceeds are limited; (2) an express rule that procurement costs are split 50/50 between claimant and insurer, with district court review available if parties dispute costs; and (3) treatment of future offsets if a worker later reopens a workers' compensation claim so insurers can account for prior tort recoveries.

Support testimony came from labor and public‑safety groups and community organizations, including New Day Nevada, Laborers locals, the Las Vegas Police Protective Association, Professional Firefighters of Nevada, Metro supervisors and Washoe County sheriff deputies. Several employer and insurer groups — notably the Nevada Resort Association, Nevada Self Insurers Association, the Vegas Chamber and large insurers — said they had been negotiating amendment language and described themselves as in soft opposition pending final text. Sabrina Schnur of the American Property Casualty Insurance Association said the group had opposed the original bill but had not yet completed review of the revised amendment.

Opponents and neutral observers urged continued negotiation. Misty Grimmer of the Nevada Resort Association said stakeholders had "very productive conversations" but remained in opposition while talks continue. Dalton Hooks of the Nevada Self Insurers Association, who said his firm litigated the underlying case that prompted the bill, described current language as promising but noted stakeholders received the revised text only shortly before the hearing and remained engaged in talks.

Presenters told the committee the amendment is meant to restore predictability after the Nevada Supreme Court's September decision in Vasquez, which, according to proponents, left district courts issuing inconsistent rulings about how to allocate limited third‑party recoveries. Brazier said many cases filed since that decision have been routed to district courts, producing different outcomes and creating uncertainty for claimants and insurers.

No committee vote was taken during the hearing. Sponsors and stakeholders said they would continue negotiations on amendment language before any future committee action.

The committee opened the hearing on SB 258 at the start of the agenda and closed it after testimony; the bill was not advanced or rejected during this session.

(Reporting from committee hearing; no formal vote was recorded.)