Workers’ Compensation · Primary-source case analysis

Cowart: An Unapproved Third-Party Settlement Can Terminate Longshore Benefits

By Aneeta Mishra and Timothy Chan

Published August 18, 2026

Estate of Cowart v. Nicklos Drilling Co. involved a Longshore Act claimant who settled with a third party after his occupational disease was diagnosed but before a compensation award became final.

The worker settled after becoming entitled to compensation

Cowart had a covered occupational injury and therefore fit the statutory phrase person entitled to compensation when he executed the third-party settlement, even though no formal award had yet been entered.

Entitlement did not depend on an administrative award

The Court read entitlement as arising from satisfaction of the Act’s conditions, not from the later order that quantified or formally recognized the benefit.

Section 33(g) imposed a strict approval consequence

Because the settlement was for less than the compensation entitlement and lacked the required written employer and carrier approval, the statute terminated compensation and medical benefits.

The judgment enforcing forfeiture was affirmed

The Court applied the enacted language despite the harsh consequence. Parties must still determine which subsection applies, compare settlement and compensation amounts, and satisfy current notice and approval requirements.

Key takeaways

• Analyze Longshore entitlement before resolving any third-party claim.
• Compare the proposed settlement with the statutory compensation entitlement.
• Obtain written employer and carrier approval before execution when required.
• Preserve the approval form, notice, release, allocation, and payment evidence.