Why a DBA Third Party Settlement Needs Written Approval

Last updated August 31, 2026 · Reviewed by Carolyn Frank

A contractor injured overseas can pursue a Defense Base Act claim and a separate lawsuit against the outside company whose negligence caused the injury, without choosing between the two. Section 33(a) of the Longshore and Harbor Workers’ Compensation Act, 33 U.S.C. § 933(a), says so directly, and it governs DBA claims through 42 U.S.C. § 1651(a).

Section 33(g) of the same statute attaches a condition to that second claim. Settling with the third party for an amount less than the compensation the Act would pay requires written approval from both the employer and its insurance carrier, obtained before the settlement is executed. Where that approval is not obtained and filed, Section 33(g)(2) terminates all rights to compensation and medical benefits under the Act. The Defense Base Act attorneys at Friedman, Rodman & Frank, P.A. see this come up most often in vehicle and convoy cases.

What DBA Third Party Settlement Approval Requires

A third-party claim is a separate case against a company other than the employer whose negligence contributed to your injury. On an overseas contract that is often the trucking company that owned the vehicle, the subcontractor whose crew rigged the load, or the base-support firm that maintained the equipment. Convoy and base-support work puts contractors in Iraq alongside trucks, crews, and equipment owned by companies that are not their employer, which is where most third-party claims start.

Section 33(g)(1) is specific about what the approval has to be:

• In writing, from both the employer and the employer’s insurance carrier. One of the two signing is not enough.
• Obtained before the settlement is executed. The statute keys to signing, not to when the money arrives.
• On a form the Secretary of Labor provides, rather than in ordinary correspondence.
• Filed within 30 days after the settlement is entered into.

The condition that triggers the requirement is that the settlement comes in below the compensation the Act would pay. That figure is rarely knowable while a claim is still open, because it turns on how long a disability lasts and what the medical treatment ends up costing. We treat the approval as necessary in every third-party settlement for that reason.

The Forfeiture Reaches Workers Nobody Is Paying Yet

One reading of Section 33(g) that comes up often is that it binds only a contractor who is already collecting benefits. The Supreme Court closed that reading in Estate of Cowart v. Nicklos Drilling Co., 505 U.S. 469 (1992). Floyd Cowart settled a negligence case without written approval at a point when his employer had paid him nothing and was under no order to pay.

The Court held that the forfeiture provision applies to a worker whose employer, at the time of the settlement, is neither paying compensation nor subject to an order to pay. A person becomes entitled to compensation the moment the right to recover under the Act vests, whether or not anyone has acknowledged or adjudicated it. The Court recognized that the provision can work harshly and said that changing it belongs to Congress rather than the courts.

The practical reading for a contractor is that a claim that has been denied, or never filed, or left unanswered by the carrier is still a claim Section 33(g) can extinguish.

The Separate Duty to Report Any Settlement

Section 33(g)(2) carries two triggers, and only the first is about approval. Rights terminate where no written approval is obtained and filed as Section 33(g)(1) requires. Rights also terminate where the employee fails to notify the employer of any settlement obtained from, or judgment rendered against, a third person.

No dollar condition is attached to that second trigger. The approval requirement applies where a settlement comes in under the compensation entitlement. The notice duty applies to any settlement and to any judgment, including one that came out well. A contractor who wins at trial and tells no one has a reporting problem even though nothing was settled.

The statute adds that the termination stands regardless of whether the employer or the carrier has made payments or acknowledged entitlement to benefits, which puts the point the Court reached in Cowart into the text itself.

Before You Sign With a Third Party’s Insurer

An offer from a third party’s insurer usually arrives with no mention of Section 33(g), because the company making it has no duty to protect a Defense Base Act claim it is not paying. Friedman, Rodman & Frank, P.A. represents civilian contractors injured on overseas government contracts, and we can pursue the written approval before a settlement is signed rather than litigate the consequences afterward. Call (877) 448-8585 or submit a case review to talk it through. The consultation is free, and our fee comes out of what we recover, so there is nothing to pay if we recover nothing.