delivered the Opinion of the Court.
Sunny Acres Villa, Inc., the employer in the underlying action for permanent total disability benefits, sought review of the court of appeals' decision in Cooper v. Industrial Claim Appeals Office, 998 P.2d 5 (Colo.App.1999), by writ of certiorari. The court of appeals set aside the order of an administrative law judge ("ALJ"), which denied permanent total disability ("PTD") benefits to claimant Charla Cooper on the ground that her injuries were not substantially work-related. The court of appeals held instead that the doctrine of collateral estoppel operated to foreclose any inquiry into causation, which it considered already to have been determined in connection with Cooper's application for temporary total disability ("TTD") benefits. Because a claim for a temporary disability award does not present an employer with the same incentive to litigate as does a claim for a permanent award, issues presented with regard to the latter cannot be deemed fully and fairly litigated at a prior proceeding for the former. Accordingly, the judgment of the court of appeals is reversed and the case is remanded for further proceedings consistent with this opinion.
I.
The incident giving rise to this action occurred on May 18, 1992. It was uncontested that Respondent Charla Cooper, a nurse employed by Sunny Acres, slipped and fell while at work and sustained injuries to her head, hip, back, pelvis, foot, ankle, knee and shoulder. Cooper submitted a claim for TTD *46benefits 1, in response to which Sunny Acres admitted liability and agreed to pay TTD benefits and other related medical expenses. On February 3, 1998, Cooper returned to work, thereby terminating her entitlement to TTD benefits, see § 8-42-105(8)(b), but continued to experience physical and psychological problems. In June of 1998, Cooper attained maximum - medical - improvement ("MMI")2 with a 5% overall impairment according to her treating physician. Over the next several months, however, Cooper's physical and psychological condition deteriorated, and she requested a review and reopening of her TTD award, pursuant to seetion 8-48-308(2)(a), as of December 8, 1993. Sunny Acres contested this request, arguing that Cooper's deteriorating condition was not attributable to her work-related injury.
Following a hearing on Cooper's condition, the presiding ALJ issued an order dated August 12, 1994, in which he found that Cooper had proven by a preponderance of the evidence that her condition had worsened to the point that she had again become temporarily and totally disabled as of December 8, 1998. Finding nothing in the Workers' Compensation Act to the contrary, the ALJ explained that he did not consider an independent medical exam necessary for purposes of adjudicating a claim for temporary disability benefits based on a worsened condition. Included in the order was a finding that Cooper's physical and psychological impairment had been proximately caused by the work-related injury she sustained on May 13, 1992. Accordingly, Sunny Acres was ordered to provide Cooper with medical and TTD benefits as of December 8, 1998.
Cooper continued to receive TTD benefits until March 4, 1996, at which time she was again found to have attained MMI. She subsequently requested a hearing to determine her entitlement to permanent total disability ("PTD") benefits.3 At this point, Sunny Acres requested that a division-sponsored, independent medical exam be performed on Cooper. The physician who performed that exam concluded that as of March 4, 1996, Cooper had attained MMI from a psychiatric standpoint, leaving her with a sixty percent psychiatric impairment. The physician noted, however, that Cooper's work-related injury was not a significant factor relative to her overall disability, and that the psychiatric impairment was the result of her pre-existing psychological function.
After considering several conflicting medical opinions, a second ALJ concluded that Cooper had failed to prove by a preponderance of the evidence that the work-related injury was a significant factor contributing to her permanent total disability. Without referring specifically to either collateral estop-pel or the "law of the case" doctrine, Cooper argued that the second ALJ was bound by the first ALJ's finding regarding the causation of her injuries. In response, the ALJ characterized Cooper's contention as raising the "law of the case" doctrine, and found that the first ALJ's findings, made in connection with Cooper's claim for TTD benefits, were not entitled to deference because they did not concern PTD benefits specifically. As such, Cooper's claim for PTD benefits was denied.
Cooper appealed the second ALJ's rulings to the Industrial Claim Appeals Office (ICAO"), which affirmed, and then to the court of appeals, which on rehearing set aside the order. Cooper v. Indus. Claim Appeals Office, 998 P.2d 5 (Colo.App.1999). Although Cooper raised the issue whether the ALJ was bound by the earlier causation finding under the doctrine of "law of the case," the court of appeals addressed the substance of Cooper's argument under collat*47eral estoppel principles.4 As it found all of the elements of collateral estoppel satisfied, the court of appeals concluded that the initial finding that the injuries were work-related, made in connection with Cooper's claim for TTD benefits, was binding on the second ALJ for purposes of adjudicating Cooper's claim for PTD benefits. Accordingly, the court of appeals set aside the final order of the ICAO and remanded the matter for reconsideration in light of the initial finding that the injury was work-related. Sunny Acres' petition for certiorari followed.5
IL.
Collateral estoppel, or issue preclusion, is a judicially created, equitable doe-trine that operates to bar relitigation of an issue that has been finally decided by a court in a prior action. Bebo Constr. Co. v. Mattox & O'Brien, P.C., 990 P.2d 78, 84 (Colo.1999); 18 Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice & Procedure: Jurisdiction § 4403 (1981). The doctrine serves to relieve parties of multiple lawsuits, conserve judicial resources, and promote reliance on the judicial system by preventing inconsistent decisions. Bebo Constr., 990 P.2d at 84. Although originally developed in the context of judicial proceedings, issue preclusion is just as viable in administrative proceedings and may bind parties to an administrative ageney's findings of fact or conclusions of law. Id. at 85; Indus. Comm'n v. Moffat County Sch. Dist. RE No. 1, 732 P.2d 616, 620 (Colo.1987).
Issue preclusion bars relitigation of an issue if: (1) the issue sought to be precluded is identical to an issue actually determined in the prior proceeding; (2) the party against whom estoppel is asserted has been a party to or is in privity with a party to the prior proceeding; (3) there is a final judgment on the merits in the prior proceeding; and (4) the party against whom the doctrine is asserted had a full and fair opportunity to litigate the issue in the prior proceeding. Bebo Constr., 990 P.2d at 85; Guar. Nat'l Ins. Co. v. Williams, 982 P.2d 306, 308 (Colo.1999); Indus. Comm'n, 732 P.2d at 619-20. Only when each of these elements has been satisfied are the equitable purposes of the doctrine furthered by issue preclusion.
-It is settled law that a full and fair opportunity to litigate an issue requires not only the availability of procedures in the earlier proceeding commensurate with those in the subsequent proceeding, Maryland Cas. Co. v. Messina, 874 P.2d 1058, 1062 (Colo.1994), but also that the party against whom collateral estoppel is asserted have had the same incentive to vigorously defend itself in the previous action, Salida Sch. Dist. R-32-J v. Morrison, 782 P.2d at 1166-67; Restatement (Second) of Judgments § 28(5)(c) & emt. j (1982).6 A party necessarily lacks the same incentive to defend where its exposure to liability is substantially less at the earlier proceeding. Salida, 732 P.2d at 1166-67. In addition to the amount of potential money awards, significant variations in exposure may arise from differences in the finality or permanence of judgments, see In re C.M., 675 N.E.2d 1134, 1137-38 (Ind.Ct.App.1997) (recognizing that *48parent's incentive to defend in a "Child in need of supervision" proceeding, where resulting order is temporary in nature and entitles parent and child to government services, is dramatically different from incentive to vigorously litigate same issues in parental-termination proceeding, where the result is permanent and completely severs parent-child relationship); In re Frederick, 405 Mass. 1, 537 N.E.2d 1208, 1211-1212 (1989) (recognizing that even though standards of proof and findings in "care and protection" proceeding are identical to those in subsequent "consent to adoption" proceeding, collateral estoppel inapplicable because incentive to litigate custody or appeal findings from earlier proceeding, which are limited and do not carry same degree of finality, may be substantially less than incentive to litigate or appeal findings in adoption proceeding, which permanently terminates legal parent-child relationship), as well as from differences in the potential duration of orders to provide installments of a fixed amount, rendering the party's overall exposure a direct consequence of the order's duration. See, eg., Ferris v. Hawkins, 135 Ariz. 329, 660 P.2d 1256, 1259 (App.1983) (noting marked difference in available remedies where one was limited in compensation and duration and the other posed much greater degree of liability with long term consequences).
Although the incentive to vigorously defend might be artificially created by the operation of collateral estoppel principles, augmenting a party's incentive to litigate in the first instance would undermine the very purpose behind permitting temporary orders or expedited and inexpensive adjudication of smaller claims in a number of contexts. In the analogous context of unemployment proceedings, this court in Salida recognized that:
If findings entered at an unemployment compensation hearing may be used to establish the employer's liability for unlawful discharge in a subsequent lawsuit, the employer would have a strong incentive to use its superior resources consistently to oppose a discharged employee's claim for unemployment benefits. Issues presented to the Division will be contested strongly, and the hearings will become lengthy and more detailed, and will no longer be suited to the prompt resolution of unemployment compensation claims.
Salida, 732 P.2d at 1165; see also Williamsen v. People, 735 P.2d 176, 182 (Colo.1987) (recognizing that compelling reasons may exist not to apply collateral estoppel where proceedings are tailored to promote prompt, inexpensive adjudication of smaller claims).
These considerations apply equally to the adjudication of workers' compensation benefits. See" Messina, 874 P.2d at 1066 n. 13 (recognizing that rationale underlying inapplicability of collateral estoppel to unemployment hearings is useful when analyzing same doctrine in workers' compensation cases). Temporary total disability benefits are limited to statutorily prescribed amounts and may extend only until the occurrence of certain statutorily prescribed events. Permanent total disability benefits continue until the death of the disabled worker. The difference in potential duration of benefits alone demonstrates the difference in exposure to an employer. Furthermore, one of the primary purposes underlying Colorado's Workers' Compensation Act is to "assure the quick and efficient delivery of disability and medical benefits to an injured worker at a reasonable cost to employers, without the necessity of any litigation." § 840-1021), 3 CRS. (2000). The application of issue preclusion to matters initially addressed in a temporary disability hearing would likely compel employers to vigorously contest initial determinations regarding workers' compensation benefits, in turn promoting litigation and unduly delaying receipt of any benefits. See Tenorio v. State, 931 P.2d 234, 240 (Wyo.1997) (expressing concern that application of collateral estoppel to permanent disability hearings would substantially delay payment of legitimate claims and undereut intent of Wyoming's Act by forcing employers to fully litigate all causation issues at initial proceeding). If collateral estoppel were applicable to the factual findings made during proceedings for disability benefits, the underlying policies supporting quick adjudication of such benefits, which involve narrow issues of law and *49afford a limited remedy, would be severely hampered.
While not articulating a consistent rationale for doing so,7 courts addressing this issue in other jurisdictions have similarly refused to treat the causation of permanent injuries as having been resolved by determinations of causation relative to temporary injuries. See, e.g., Betts v. Townsends, Inc., 765 A.2d 531, 535 (Del.2000) (holding that determination of causation in permanent disability hearing not barred by estoppel because "[wlhether an industrial accident caused temporary total disability or permanent partial disability are two distinct questions"); In re Bailey, 769 A.2d 360, 362, 2001 NH. LEXIS 54, "4 (N.H.2001) (declining to apply issue preclusion where agency awarded benefits for temporary disability but made no finding as to permanent disability); Appeal of Hooker, 142 N.H. 40, 694 A.2d 984, 986-88 (1997) (finding collateral estoppel inapplicable even where alleged injury giving rise to both proceedings is the same and allegedly flows from same work-related injury because issue of causation determined in TTD hearing is different from issue of causation relevant to subsequent medical benefits hearing); Tenorio, 931 P.2d at 240 (recognizing the inherent policy problems associated with applying issue preclusion to permanent disability proceedings and construing Wyoming's workers' compensation act as inconsistent with the doctrine in that context).
Because an employer always risks an award of substantially longer duration at a proceeding to determine permanent total disability than it does at a proceeding to determine temporary total disability, it never has the same incentive to vigorously litigate issues at the latter that it does at the former. Furthermore, augmenting the stakes of the temporary disability hearing by affording collateral estoppel effect to findings made therein would contravene an important purpose of the Workers' Compensation Act served by treating temporary and permanent disability differently. Whether or not issues involving temporary and permanent injuries are properly treated as identical, the doctrine of collateral estoppel therefore does not apply.
IIL.
Accordingly, the court of appeals erred by applying collateral estoppel to preclude Sunny Acres from litigating the issue whether Cooper's permanent disability was work-related. The judgment of the court of appeals is therefore reversed and the case is remanded for further proceedings consistent with this opinion.
Justice MARTINEZ dissents, and Chief Justice MULLARKEY and Justice BENDER join in the dissent.. TTD benefits are received until the first occurrence of any one of several events delineated at section 8-42-105(3), 3 C.R.S. (2000), including the attainment of "maximum medical improvement," § 8-42-105(3)(a), and returning to "regular or modified employment," § 8-42-105(3)(b).
. Section 8-40-201(11.5), 3 C.R.S. (2000), defines "maximum medical improvement" as "a point in time when any medically determinable physical or mental impairment as a result of injury has become stable and when no further treatment is reasonably expected to improve the condition."
. PTD benefits continue until death but cannot be in excess of the maximum weekly benefits prescribed for injuries causing temporary total disability. § 8-42-111(1).
. Sunny Acres contends that Cooper waived any argument regarding collateral estoppel because she failed to specifically raise it in the proceedings below, having instead raised the "law of the case" doctrine. Because we conclude that the court of appeals erred by applying the doctrine of collateral estoppel, however, it is unnecessary to address whether Cooper waived her ability to assert it.
. This court granted certiorari to consider the following issues:
(1) whether the claimant waived the affirmative defense of collateral estoppel;
(2) whether the court of appeals erred in applying the doctrine of collateral estoppel to the present case; and
(3) whether the court of appeals erred by determining that the doctrine of collateral es-toppel barred the ALJ's determination that the claimant's injury was not a significant factor in her permanent disability.
. Whether or not the division-sponsored, independent medical exam, considered unnecessary by the first ALJ for the adjudication of temporary disability benefits based on a worsened condition but relied upon by the second ALJ in denying permanent disability benefits, amounted to a significant difference in available procedures, the absence of the same incentive to defend is sufficient to demonstrate no full and fair opportunity to litigate the issue.
. Much of this inconsistency stems from the fact that similar concerns related to the application of issue preclusion in this context can be expressed in terms of either the similarity between the previously litigated and presently litigated issues or the estopped party's opportunity to fully and fairly litigate the previously litigated issue. See 18 Wright, supra, § 4423, at 220 ("As with many other limitations on issue preclusion, concern with the opportunity to litigate in the first case is easily justified when it is mingled with uncertainty as to identity of the issues or actual litigation.").