WC Carrier Can Subrogate Against UM Benefits
Ryan Zavodnick | January 4, 2016 | Workers' Compensation
In Davis v. WCAB (PA Social Services Union), the Commonwealth Court held that a workers’ compensation insurance company may subrogate against benefits received by an injured worker through a co-worker’s uninsured motorist benefits. While this holding was not unexpected, it highlights the importance of retaining an experienced Philadelphia workers’ compensation lawyer if you have been hurt at work, particularly if you were injured as a result of a car accident because there are many factors and laws implicated that you may not be familiar with.
Ms. Davis Was Injured In A Work-Related Car Accident And Received Workers’ Compensation Benefits
The facts of this case are straightforward and occur all too often. Karen Davis was a passenger in a vehicle owned and operated by her co-worker, Vandallia Jarvie. An unknown driver caused a car accident with Jarvie’s vehicle, and Ms. Davis sustained a work-related injury as a result. Ms. Davis was paid workers’ compensation benefits following the car accident. She also filed an uninsured motorist claim with Allstate Insurance Company, the motor vehicle insurance carrier for Jarvie’s vehicle.
The workers’ compensation insurance carrier asserted a subrogation lien against the uninsured motorist recovery, which was $25,000. The claimant’s workers’ compensation lawyer contested the insurance company’s right of subrogation, and, after losing before the workers’ compensation judge and the Appeal Board, the attorney appealed to the Commonwealth Court.
What Is Subrogation?
Subrogation refers to the workers’ compensation insurance company’s right to receive money back that it has paid out to an injured worker following an injury in the event the injured worker ultimately recovers money from another individual or entity who is deemed to be at fault in causing the work-related injury. This right arises under Section 319 of the Workers’ Compensation Act and has been held to be absolute in prior court decisions. The principle behind subrogation is to prevent a double recovery by the injured worker.
We most often encounter subrogation issues when an injured worker is involved in a work-related car accident and receives workers’ compensation benefits before receiving a settlement from the negligent party’s motor vehicle insurance carrier, however, subrogation issues sometimes arise in construction accident cases as well. In the car accident context, the workers’ compensation insurance company, after having paid out benefits, is able to receive some, not all, of its money back out of the third party settlement with the motor vehicle insurance company. However, the courts have previously denied subrogation claims when the motor vehicle recovery is from the injured worker’s own uninsured or underinsured motorist benefits.
The Court Held That The Insurer’s Subrogation Claim Was Valid
The court held that the insurance company was entitled to subrogate against the recovery through the co-worker’s uninsured motorist policy because the policy was not paid for by the injured worker, in contrast to prior cases denying subrogation when the injured worker received benefits through a policy paid for by the injured worker. The court rejected the workers’ compensation lawyer’s argument that subrogation should only be allowed when the workers’ compensation insurance company paid for the uninsured/underinsured motorist coverage.
Having An Experienced Workers’ Compensation Lawyer In Your Corner Is Essential
This case highlights the importance of having an experienced workers’ compensation and personal injury lawyer in your corner. Subrogation issues can be complicated, even for experienced attorneys. There are numerous issues that arise when there is a third party claim resulting from a work accident. Hiring a lawyer who has experience litigating car accident cases as well as workers’ compensation cases is critical.
Timing issues can arise with respect to when to settle, and experienced counsel can often negotiate with the workers’ compensation insurance company to ensure that you receive as much out of the third party settlement as is possible. If you have been injured in a work-related car accident, contact one of the Philadelphia personal injury lawyers at Zavodnick, Zavodnick & Lasky, LLC today for a free consultation.