The State Accident Insurance Fund (SAIF) appeals from a “third party settlement” order of the Workers’ Compensation Board that permitted allocation of $15,000 of a $65,000 settlement of claimant’s action against a third-party tortfeasor to claimant’s wife for her claim for loss of consortium. We reverse.
In June, 1981, claimant was injured in a motor vehicle accident while temporarily in California in the course and scope of his employment. He filed a workers’ compensation claim and also elected to pursue his third-party cause of action against the California tortfeasors. ORS 656.154. SAIF was claimant’s employer’s insurer. It associated a California attorney to represent its interest in its statutory right to a lien against claimant’s recovery. See ORS 656.593(1).
Claimant and his wife filed a complaint in California, alleging two causes of action, one for personal injury and wage loss to claimant and the other for loss of consortium to claimant’s wife. In August, 1982, claimant and his wife agreed to settle their tort actions for $65,000, the policy limits of the defendants’ liability insurance. Information of that settlement apparently was related orally to SAIF’s California attorney, Lambert. On August 27, 1982, Lambert wrote a confirming letter to claimant’s California attorney, Ginsburg, acknowledging Ginsburg’s “communication of August 24, 1982, advising of settlement of Mr. Cowart’s third party lawsuit arising out of the subject motor vehicle accident for * * * $65,000.” In that letter, Lambert advised that SAIF had been apprised of the settlement and had approved it. SAIF approved the settlement in writing on September 7,1982. On September 17, Ginsburg wrote to Lambert, advising that he was allocating $15,000 of the settlement to claimant’s wife’s claim for loss of consortium. On September 21, Lambert advised that that allocation was unacceptable, because SAIF’s initial approval of the settlement was based on the understanding that Mr. Cowart’s recovery was $65,000. SAIF’s total costs for benefits already paid and anticipated future benefits exceeded that amount.
Both parties requested the Board to determine a just and proper distribution of the proceeds of the settlement, *736pursuant to the Board’s authority under ORS 656.593(3).1 The Board concluded that the matter was more accurately a dispute between claimant and SAIF regarding the compromise of claimant’s action against the third parties, which the Board had authority to approve under ORS 656.587.2 It treated the proceeding as one arising on a petition by claimant requesting the Board to approve settlement of his cause of action against the third-party tortfeasor which had been negotiated with the third parties’ insurers and which SAIF had refused to approve because of a disagreement with claimant’s proposed apportionment of the proceeds. The Board found that the proposed settlement of $50,000 for claimant’s third-party action was reasonable and approved the settlement for that amount. SAIF appeals.
SAIF first contends that the Board lacked authority under ORS 656.587 to modify the parties’ prior agreement that claimant’s claim would be settled for $65,000. It also contends that distribution of $15,000 of claimant’s settlement proceeds to claimant’s wife, a party outside the workers’ compensation system, is not authorized by statute. We separately discuss these contentions.
When there is a dispute between a claimant and an employer or the employer’s insurer regarding the appropriateness of a proposed settlement of a third-party action, the Board may order approval of the settlement. ORS 656.587. Although the Board treated this proceeding as a disputed settlement, we do not agree with that characterization. Unfortunately, the record does not contain all of the communications between the parties, but we are able to discern from what *737there is that there was no dispute as to the amount of the settlement for claimant’s cause of action when SAIF’s approval of the settlement was sought or when SAIF gave its express written approval. SAIF’s letter of August 27, 1982, acknowledged claimant’s communication of a proposed settlement of “Mr. Cowart’s” claim for $65,000. SAIF’s formal approval letter of September 7,1982, although referring to the matter of “Leon Cowart, et al,” outlined a proposed distribution of the settlement proceeds consistent with an understanding that claimant’s recovery was $65,000.3 Ginsburg’s letter of September 17,1982, announcing that he was allocating $15,000 of the settlement to claimant’s wife’s claim, was the first indication to SAIF that any of the $65,000 was to be so applied, and that letter contains an acknowledgement that previous discussions did not include her claim. Its injection into the terms of the settlement appears to have been prompted by belated discussions between claimant’s California and Oregon attorneys. A letter, also dated September 17, 1982, signed by Ginsburg and addressed to claimant’s Oregon attorney, states:
“I am very glad * * * you thought of this phase of the settlement. Mrs. Cowart, in my opinion, is entitled to a share of the settlement. I feel sure that if this case had gone to a trial the court, or jury, would have awarded her a portion of the total damages. Naturally, we cannot know at this time what amount it would be, but in view of the considerable injury to her husband, she could make out a strong case for a substantial award in her favor.
“While it is true that heretofore all discussions have been concerned with Leon’s share of the total recovery of *738$65,000.00, that has been due to our oversight of the right of Mrs. Cowart to a part of the settlement. Whether SAIF will agree to $15,000, or to some other amount, will, of course, remain to be seen.”
Although claimant’s attorneys may have overlooked Mrs. Cowart’s right to a part of the settlement when negotiating with SAIF for its approval, SAIF was entitled to rely on claimant’s initial representation that the entire settlement was for his cause of action. Clearly, the parties agreed to a settlement of claimant’s cause of action for $65,000; he thereafter attempted to change the agreement. Separate provision could have been made for claimant’s wife’s claim for loss of consortium prior to the time claimant sought SAIF’s approval of the settlement, but it was not. Claimant’s unilateral decision that $15,000 of the proceeds be allocated to her claim came too late. Under those circumstances, the Board was without authority under ORS 656.587 to restructure the parties’ actual agreement to settle claimant’s cause of action for $65,000 so as to permit recognition of claimant’s wife’s claim for loss of consortium. Consequently, the Board lacked authority to exercise any judgment regarding any settlement of claimant’s cause of action against the third party for $50,000.
We turn now to what the Board could do. SAIF’s second contention focuses on the provisions of ORS 656.593, which establishes the distribution scheme for proceeds of third-party-damage actions.4 It argues that the statutory *739scheme does not authorize distribution of any portion of a claimant’s recovery to a party who, like claimant’s wife, has a separate claim outside the workers’ compensation system.5 We agree.
Reversed and remanded for reconsideration.