Are fees awarded to an employer's attorney and their pro rata share of other litigation costs deducted from the amount paid to the employer out of the settlement proceeds?

Consistent with this court's reasoning in Quinn v. State of California (1975) 15 Cal.3d 162, 124 Cal.Rptr. 1, 539 P.2d 761 (Quinn ), and with the law in a substantial majority of our sister states, we have concluded that under section 3860(e) the fees awarded to the employer's attorney and the employer's pro rata share of other litigation costs are to be deducted from the amount paid to the employer out of the settlement proceeds as reimbursement for its workers' compensation expenses.