In the event of a third-party recovery, who has the first right to recover expenses if the employer's line does not exceed the amount recovered?

In the context of third-party recoveries in California workers' compensation claims, the employer typically has the first right to recover expenses. If an employee who has received workers' compensation benefits then pursues a claim against a third party and successfully recovers damages, the employer is entitled to reimbursement for the benefits it has paid to the worker. This right comes from the principle that when the employer incurs costs due to a workplace injury, including medical expenses and indemnity payments, they can recoup these from any recovery that the employee receives from a third party, up to the amount of those expenses.

This framework is established under California Labor Code Section 3860, which prioritizes the employer's right to recover costs in order to maintain the balance of the workers’ compensation system. It allows employers to protect their financial interests while still making benefits available to employees injured on the job.

The other options do not reflect the legal structure regarding third-party recoveries, as employees may seek to recover damages for personal injury, but the employer's right to first recover expenses showcases the employer's interest in recouping their losses in the workers' compensation system.