Ala. Code § 25-5-11(a) permits an employee to proceed against his employer for compensation benefits and, at the same time, to proceed against any other party who may also be liable for the employee's injuries. Section 25-5-11(a) states in part:
“If the injured employee recovers damages against the other party, the amount of the damages recovered and collected shall be credited upon the liability of the employer for compensation. If the damages recovered and collected are in excess of the compensation payable under this chapter, there shall be no further liability on the employer to pay compensation on account of the injury or death. To the extent of the recovery of damages against the other party, the employer shall be entitled to reimbursement for the amount of the compensation theretofore paid on account of injury or death. For purposes of this amendatory act, the employer shall be entitled to subrogation for medical and vocational benefits expended by the employer on behalf of the employee.”
The Alabama Supreme Court has held that the employer is entitled to be subrogated to that portion of the employee's third-party recovery that is properly attributable to compensation for both the past and future medical expenses the employer has paid or would be legally required to pay to the employee.
Watching developments in this are of the law has become somewhat like watching a tennis match. One case in particular has been to the appellate courts and back to the trial court four times: Miller & Miller Constr. Co. v. Madewell, 736 So. 2d 1098 (Ala. Civ. App. 1998) (“Madewell I”); Ex parte Miller & Miller Constr. Co., 736 So. 2d 1104 (Ala. 1999) (“Madewell II”); Miller & Miller Constr. Co. v. Madewell, 766 So. 2d 855 (Ala. Civ. App. 2000) (“Madewell III”); and Miller & Miller Constr. Co. v. Madewell, 2003 Ala. Civ. App. LEXIS 838 (Ala. Civ. App. Oct. 31, 2003) (“Madewell IV”).
When an injured worker is hurt on the job and as a result has a third-party claim, there are times when the workers’ compensation carrier holds the injured worker hostage and forces the injured worker to give up the valuable right to future medical benefits in order to acquiesce to settlement of a subrogation claim. As Judge Yates wrote in her special concurrence in Skilstaf, Inc. v. Williams, 2002 Ala. Civ. App. LEXIS 725 (Ala. Civ. App. 2002), aff’d by Ex parte Williams, 2003 Ala. LEXIS 396, “The purpose of the Workers' Compensation Act, however, is to provide fair and just compensation for injured workers [ . . . ] As a result, it would appear that before an employer's subrogation rights attach to a third-party settlement, that employer must demonstrate that the injured employee is fully compensated and made whole for all of the damages suffered by him or her.”