Draper

I respectfully dissent. The result reached by the majority defeats the priority given by Labor Code section 3860, subdivision (e), to the *1096 payment of an employee’s attorney fees, when attorneys for both the employer and the employee actively participate in obtaining a recovery against a negligent third party.

Labor Code section 3860, subdivision (e), gives priority to the payment of both the employer’s and the employee’s attorney fees: “Where both the employer and the employee are represented ... by separate attorneys in effecting a settlement, . . . prior to reimbursement of the employer . . . there shall be deducted from the amount of the settlement the reasonable expenses incurred by both the employer and the employee . . . together with reasonable attorneys’ fees . . . .” (Italics added.) The plurality opinion in Summers v. Newman (1999) 20 Cal.4th 1021, 1024 [ 86 Cal.Rptr.2d 303 , 978 P.2d 1225 ] (plur. opn. of Kennard, J.), acknowledged this: “[Subdivision (e) of section 3860 . . . provides that the settlement proceeds are to be used first to pay litigation costs, including reasonable attorney fees incurred by the employer and the employee . . . .” (Italics added.)…

When an employee is injured at work through the fault of someone other than the employer, the Workers' Compensation Act (Lab.Code, § 3200 et seq.) [1] permits the employee not only to claim workers' compensation benefits from the employer but also to recover personal injury damages from the party at fault. (§ 3852.) To obtain reimbursement for the cost of the benefits paid to the employee, the employer may bring its own action against this third party, or it may intervene in the employee's personal injury action. (§§ 3852-3853.) If the third party action or actions result in a recovery, either by settlement or by judgment, the employer's subrogation claim has priority and the employee is entitled only to the amount, if any, remaining after full reimbursement of the employer for benefits it has paid to the employee. (§§ 3856 [recovery by judgment], 3860 [recovery by settlement].)

In Summers v. Newman (1999) 20 Cal.4th 1021 , 86 Cal.Rptr.2d 303 , 978 P.2d 1225 (Summers) , this court addressed an issue concerning an employer's right to have its attorney fees paid out of settlement proceeds recovered from a third party through the joint efforts of attorneys separately…

When an employee is injured at work through the fault of someone other than the employer, the Workers’ Compensation Act (Lab. Code, § 3200 et seq.) 1 permits the employee not only to claim workers’ compensation benefits from the employer but also to recover personal injury damages from the party at fault. (§ 3852.) To obtain reimbursement for the cost of the benefits paid to the employee, the employer may bring its own action against this third party, or it may intervene in the employee’s personal injury action. (§§ 3852-3853.) If the third party action or actions result in a recovery, either by settlement or by judgment, the employer’s subrogation claim has priority and the employee is entitled only to the amount, if any, remaining after full reimbursement of the employer for benefits it has paid to the employee. (§§ 3856 [recovery by judgment], 3860 [recovery by settlement].)

In Summers v. Newman (1999) 20 Cal.4th 1021 [ 86 Cal.Rptr.2d 303 , 978 P.2d 1225 ] (Summers), this court addressed an issue concerning an employer’s right to have its attorney fees paid out of settlement proceeds recovered from a third party through the joint efforts of attorneys separately…