176Remedies against employer and a stranger

176 Remedies against employer and a stranger (1) Subject to this Act, if an injury in respect of which compensation is payable under this Act is caused under circumstances that appear to create a legal liability in some person other than the employer to pay damages in respect of the injury, the person entitled to compensation may take proceedings against that person to recover damages and may also make a claim against the employer for compensation. (2) Where a person receives compensation and recovers damages from another person in respect of the same injury: (a) he or she shall repay to the employer such amount of the compensation as does not exceed the amount of those damages recovered from that person; and (b) on notice to that other person, the employer shall have a first charge on moneys representing those damages payable by that person to the first-mentioned person to the extent of compensation which the employer has paid. (3) Where a person has received compensation under this Act but no damages to which subsection (2) applies, or less than the full amount of those damages to which he or she is entitled, the person liable to pay the damages shall indemnify the employer against so much of the compensation paid to the first-mentioned person as does not exceed those damages for which the person is liable and subsequent payment of that money shall, to the extent of the amount paid, be a satisfaction of the liability of that person to the first-mentioned person. (4) Where the Nominal Insurer makes a payment under this Act to a person, this section applies as if references to the employer included references to the Nominal Insurer, but so that: (a) the Nominal Insurer is not entitled to receive, under subsection (2), more than the amounts paid by it under this Act; and

Return to Work Act 1986 145 (b) the rights of the Nominal Insurer under this section shall have priority over any rights of the employer under this section arising out of payment of compensation by the employer.