§ 227. Actionable injuries in claims for disability benefits;
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
financial services, 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
financial services, 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.