IDENTIFYING SUBROGATION OPPORTUNITIES

KEY TIPS FOR CLAIMS EXAMINERS

In workers’ compensation claims, subrogation means recovery of benefits paid from a third party in a civil lawsuit. This is a matter that may be missed by busy claims examiners. It is essential that these opportunities be taken advantage of by making sure that your subrogation rights are protected.

Subrogation may even exist where a compensable industrial injury ends up costing substantially more because it has become aggravated by the negligent act of a third-party long after the original work injury.

To avoid missing opportunities for subrogation recovery please note the following tips:

Subrogation Tip No. 1: Evaluate each claim for subrogation potential. Look for the negligent act of a third party which caused or aggravated an industrial injury. When subrogation is either suspected or identified, a third-party subrogation notice letter should be sent to the employee to preserve your subrogation rights.

A common occurrence of missed subrogation occurs when the injured employee, with or without an attorney, settles their third-party case without giving notice to the employer/insurer. If this occurs you may have difficulty in obtaining subrogation recovery from the third-party defendant. Typically the insurer will claim that they did not have notice of the subrogation claim prior to settlement, and leaving the workers compensation carrier with having to pursue a lawsuit against the employee for failure to give notice of the settlement. Even worse, the workers compensation carrier may be left with the sole remedy of relying on discretionary credit rights at the WCAB. See Board of Admin of PERS v. Glover (1983) 34 Cal. 3d 906.

Best practices include issuing a third-party notice letter or referring subrogation cases to outside counsel in the early stages rather than allowing the statute of limitations to rapidly expire.

Subrogation Key Tip No. 2: Subrogation rights extend to subsequent incidents that exacerbate underlying workers’ compensation injuries.

A typical example that often occurs is a subsequent automobile accident or other events that are the fault of a third party which exacerbate the applicant’s underlying work related injuries. Under Abdala v. Aziz (1992) 3 Cal. App. 4th 369, the workers’ compensation insurer can sue the third-party for the increase in workers’ compensation benefits paid as a result of the exacerbated injury.

It does not matter whether the subsequent incident is industrial or non-industrial as long as a third party is involved. In each instance, the opportunity exists to sue or seek reimbursement for the increase in medical treatment and indemnity caused by the subsequent incident. Moreover, apportionment will always be available and should be pursued for any increase in permanent disability as a result of a subsequent exacerbation caused by a third-party.

WHAT THIS MEANS FOR YOU

GMK is available to help you maximize your subrogation opportunities. If you have any questions regarding subrogation issues, please do not hesitate to contact Jeff Soll in our Woodland Hills office at (818) 755-0444 or jsoll@gmklaw.com.