Pennsylvania Court Holds That Workers’ Compensation Insurance Company Cannot File Suit To Recover Subrogation Lien

Posted on Friday, August 21st, 2015 at 11:41 am    

In Liberty Mutual Insurance Co. v. Domtar Paper Co. the court held that an employer or insurer who seeks reimbursement of its subrogation lien from the third-party tortfeasor may not file suit in its own name without involving the injured worker to whom benefits were paid. Oftentimes, when an employee suffers a work-related injury there may be what is known as a third-party claim that can be brought. For example, the most obvious and frequent scenario occurs when an employee is involved in a work-related motor vehicle accident. In such instances, the employee is entitled to workers’ compensation benefits, but he also may bring a tort claim for personal injuries against the negligent driver who caused the accident. However, if the injured worker files suit against the negligent driver, the workers’ compensation insurance company has a subrogation right, which means it has the right to be reimbursed for some of the money it paid out to the injured worker.

Usually the injured worker files suit against the negligent driver, and, upon settling or receiving a verdict, the workers' compensation insurance company is paid back its share of the proceeds. However, in this case, the injured worker did not file suit, and instead the insurance company filed suit on its own and in its own name in an attempt to recover its subrogation lien. The court did not allow the insurance company to do so, holding that the employer and insurer cannot bring a subrogation action independently because Section 319 of the Pennsylvania Workers Compensation Act requires a lawsuit to be brought in the name of the injured worker.

If you or a loved one have sustained a work injury, contact our Philadelphia workers’ compensation lawyers at (215) 875-7030. The experienced attorneys at Zavodnick, Zavodnick & Lasky, LLC will help you receive the compensation and justice you deserve.

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