Section 227. Actionable injuries; subrogation

1. If an employee entitled to
  disability  benefits  under this article be disabled by injury caused by
  the negligence or wrong of a third party, such employee need  not  elect
  whether to take such disability benefits or to pursue his remedy against
  such  third  party,  but  may  take his benefits under this article. The
  carrier liable for payment of disability benefits under this article  or
  the chairman in case of benefits paid under section two hundred seven or
  two  hundred  thirteen shall have a lien on the proceeds of any recovery
  from such third party, whether by  judgment,  settlement  or  otherwise,
  after  the deduction of reasonable and necessary expenditures, including
  attorneys' fees, incurred in effecting such recovery, to the  extent  of
  the  total  amount  of  disability benefits provided by this article and
  paid, and to such extent such recovery shall be deemed for  the  benefit
  of  such  carrier or the chairman. Should the employee secure a recovery
  from such third party, whether by  judgment,  settlement  or  otherwise,
  such  employee  may apply on notice to such lienor to the court in which
  the third party action was  instituted,  or  to  a  court  of  competent
  jurisdiction  if no action was instituted, for an order apportioning the
  reasonable  and  necessary  expenditures,  including  attorneys'   fees,
  incurred   in  effecting  such  recovery.  Such  expenditures  shall  be
  equitably apportioned by the court between the employee and the  lienor.
  Notice  of  the commencement of such action shall be given within ninety
  days thereafter to the employer or carrier or to the  chairman,  as  the
  case  may  be.  The  foregoing rights, limitations, and procedures shall
  also apply to actions and recoveries under the employers' liability act,
  and section six hundred eighty-eight,  title  forty-six,  United  States
  code,  and  under  the maritime doctrine of wages, maintenance and cure.
  Any  of  the  foregoing  providers  of  disability  benefits  which  has
  recovered  a lien pursuant to the provisions hereof against the recovery
  of a person  injured  on  or  after  December  first,  nineteen  hundred
  seventy-seven  and  before  July  first, nineteen hundred seventy-eight,
  through the use or operation of a motor vehicle  in  this  state,  shall
  notify  such person by certified mail, in a manner to be approved by the
  chairman and the superintendent of insurance, of the responsibilities of
  an "insurer" (as defined in subsection (g) of section five thousand  one
  hundred  two  of the insurance law), to reimburse such person under such
  circumstances to the extent that the  recovered  lien  represents  first
  party benefits as defined in article fifty-one of the insurance law.
    1-a.  Notwithstanding any other provisions of this article the carrier
  liable for payment of disability benefits under  this  article,  or  the
  chairman  in  case  benefits are paid under section two hundred seven or
  section two hundred thirteen of this chapter shall not have  a  lien  on
  the  proceeds  of  any  recovery  received pursuant to subsection (a) of
  section five thousand one hundred four of the insurance law, whether  by
  judgment,  settlement  or  otherwise for disability benefits paid, which
  were in lieu of first party benefits which another  insurer  would  have
  otherwise been obligated to pay under article fifty-one of the insurance
  law.  The  sole  remedy of any of the foregoing providers to recover the
  payments in the situation specified in the preceding sentence  shall  be
  pursuant to the settlement procedures contained in section five thousand
  one hundred five of the insurance law.
    2.  If  such disabled employee has been paid disability benefits under
  this article but has failed to commence action against such other within
  six months prior to the expiration of the statute  of  limitations,  the
  carrier  or  the  chairman,  as  the case may be, may maintain an action
  against such third party. If the carrier or the chairman,  as  the  case
  may  be,  having paid disability benefits to a disabled employee, who is
  also a "covered person" (as defined in subsection (j)  of  section  five

  thousand one hundred two of the insurance law), and who was injured in a
  motor  vehicle  accident  in  this  state  on  and after December first,
  nineteen hundred seventy-seven and before July first,  nineteen  hundred
  seventy-eight, maintains an action against such third party, who is also
  a  "covered  person",  and  recovers, whether by judgment, settlement or
  otherwise, it shall advise the disabled employee, by certified mail,  in
  a  manner  to  be  approved  by  the  chairman and the superintendent of
  insurance,  of  the  responsibility  of  an  "insurer"  (as  defined  in
  subsection (g) of section five thousand one hundred two of the insurance
  law) to further compensate such disabled employee.
    2-a. Notwithstanding any other provisions of this article, the failure
  of  a  "covered  person"  (as  defined in subsection (j) of section five
  thousand one hundred two of  the  insurance  law),  who  has  been  paid
  disability  benefits  under this article for injuries arising out of the
  use or operation of a motor vehicle in this state, to commence an action
  against such other within six months prior  to  the  expiration  of  the
  statute  of  limitations, shall not operate to permit the carrier or the
  chairman to institute an action  against  such  other  third  party  for
  recovery  of  disability benefits paid which were in lieu of first party
  benefits which an insurer would have otherwise  been  obligated  to  pay
  under  article fifty-one of the insurance law unless such third party is
  not a "covered  person".  The  sole  remedy  of  any  of  the  foregoing
  providers  to  recover  the  payments  in the situation specified in the
  preceding sentence when the other party is a "covered person"  shall  be
  pursuant to the settlement procedures contained in section five thousand
  one hundred five of the insurance law.
    3.  A  compromise  of  any  such cause of action by the employee in an
  amount less than the benefits provided by this  article  shall  be  made
  only  with  the  written  consent of the carrier or the chairman, as the
  case may be.