California, United States of America
The following excerpt is from Draper v. Aceto, 113 Cal.Rptr.2d 61, 26 Cal.4th 1086, 33 P.3d 479 (Cal. 2001):
But the plurality in Summers v. Newman, supra, 20 Cal.4th 1021, 86 Cal. Rptr.2d 303, 978 P.2d 1225, suggested in dicta, and the majority in the present case holds, that this priority to the payment of the employee's attorney fees applies only if the settlement or judgment is sufficiently large for the employee to share in the recovery. This interpretation defeats the statutory purpose, because it is only when the settlement or judgment is insufficient both to reimburse the employer and to provide a recovery for the employee that giving priority to the payment of attorney fees makes a difference.
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