No 3rd-party indemnification for workers’ comp payments

The Supreme Court of Hawaii recently ruled on an important workers’ compensation case. (Photo: Don Ramey Logan via Wikimedia Commons)

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Construction contracts are often multi-party contracts, and general contractors routinely include indemnification clauses in the agreements with subcontractors. In one recent case, an employer required indemnification for workers’ compensation benefits the employer would have to pay if its worker was injured by a third party. In a case that made its way to the Hawaii Supreme Court, the subcontractor challenged the indemnification provision, arguing that the employer had to follow the procedure outlined in the workers’ compensation statute in order to collect from a third party. Who was right?