download this document ISSUE
In Admiralty Court if state workers compensation benefits have been paid to an injured party what law does the Federal Judge follow when deciding whether or not the workers compensation carrier has a subrogation lien?
FACTS
Two New Jersey employees were on a casino boat on the Mississippi River when it was struck by a barge. Each employee was injured and collected workers compensation benefits under New Jersey state workers comp law. The injured employees also hired an attorney who brought suit against the owner of the barge. The suit was filed in federal court under admiralty law and the cases were resolved. The attorney who represented the employees in their third party case argued that the workers compensation carrier had no right of recovery because they never filed their own case and offered to resolve the liens for a minimal amount.
After some research, specifically finding a 9th Circuit case that was on point, we turned a minimal offer into a six figure recovery.
download this document "So What If You Have A Release From My Insured – Pay Me!"
Every subrogation specialist has at one time or another contacted an adverse only to be told, "Sorry, we settled with your insured and they signed a release!" This is usually quickly followed up by a fax from the adverse with a letter that they are "closing their file, see attached release." Sometimes you may be outright barred from any recovery. On the other hand, as the following article discusses, there are certain situations in which you may still be able to collect from the tortfeasor. If you can prove the adverse was on proper notice of your subrogation interest, then often the release DOES NOT bar recovery. If notice to the adverse cannot be proven, there is always the unpleasant option of looking to the insured for recovery if their settlement with the adverse was not approved by you AND the applicable release has destroyed your subrogation rights.
Because subrogation involves "stepping into" the shoes of another, when an insurer brings an action against a tortfeasor based upon its subrogation rights, the insurer's rights flow from the insured's rights. The subrogated insurer can be subrogated to and enforce only such rights as the insured has against the party whose wrong caused the loss. In a subrogation suit, a tortfeasor may assert against the insurer any defense that the tortfeasor could have asserted against the insured. Therefore, the general rule provides that an insured may affect its insurer's subrogation rights because they are derivative, i.e., the insurer's subrogation rights rest upon the viability of the insured's claim against the tortfeasor.
download this document THIRD PARTY PRACTICE IN THE CONTEXT OF A SUBROGATION CLAIM: Overlooked Dollars Recoverable Under Theories of Indemnity and/or Contribution after a Third-Party Settlement
Introduction
Because subrogation involves "stepping into" the shoes of another, when an insurer brings an action against a tortfeasor based upon its subrogation rights, the insurer's rights flow from the insured's rights. The subrogated insurer can be subrogated to and enforce only such rights as the insured has against the party whose wrong caused the loss. In a subrogation suit, a tortfeasor may assert against the insurer any defense that the tortfeasor could have asserted against the insured.
Since an insurer's rights flow from the insured's rights, it is important not to overlook subrogation actions based on indemnity and/or contribution. The key to successful Third-Party Practice in the subrogation context is understanding who has been damaged. Indemnity and/or contribution actions only arise when a third-party has been damaged. Thus, it is not the insured's damages you are seeking to recover, but instead, the carrier is seeking to enforce its insured's indemnity and/or contribution rights from another party who caused or contributed to the Third-Party's damages. In order to be successful in protecting a carrier's subrogation rights in these situations, one must understand how the applicable statutes and case law for the jurisdiction at issue control indemnity and/or contribution actions. Although this presentation will focus on South Carolina law, the majority of states follow similar statutes and/or principles when it comes to Third-Party Practice. Nonetheless, each jurisdiction needs to be properly researched in order to be sure that a third-party subrogation claim is properly protected and instituted.
download this document "It would be unconscionable for an insured not to let his insurance company share in any damages he recovers from a wrongdoer." Lord Mansfield in Mason v. Sainsbury 1782.
Origins Of Insurance In America
There seems to be a tendency for writers who are not historians when entering into historical areas to take liberties with accuracy that they would not take if they were recording present day facts and events. I believe this phenomenon exists because these writers are satisfied with recreating or recording historical facts directly from the writings of others without questions. There is also a lowering of standards that occurs when non-historians report history because they assume that their readers will not subject their historic material to microscopic examination. Writers in the insurance history theater sometimes publish "historic facts", which simply are not true. With each repetition of the alleged historic facts and with each higher level of authority that publish them uncorrected, they gain broader popular acceptance and become less susceptible to correction.
I am not a historian and so I offer the following material with the caveat set forth in the preceding paragraph with the hope that those writers who have gone before me are not too far off and that you have left your microscopes at home.
Let us begin by taking this opportunity to correct one of those "historic facts" before it becomes too cemented in the accepted history of insurance. Many of you have read or heard that the city of origin of the first fire insurance company in America is Philadelphia and that Benjamin Franklin was the founder of this insurance company.
download this document Conventional and Equitable (Legal) Subrogation
"The principle of subrogation was begotten of a union between equity and her beloved—the natural justice of placing the burden of bearing a loss where it ought to be. Being so sired this child of justice is without the form of a rigid rule of law. On the contrary it is a fluid concept depending upon the particular facts and circumstances of a given case for its applicability. To some facts subrogation will adhere—to others it will not."
download this document Negligence is the most important basis for liability against another party in the United States today. The concept of negligence has been expanded considerably through the advent of product liability and warranty doctrines to a degree that product liability and warranty theories of liability hold a separate distinct identity unto themselves in the area of tort liability. On the other hand historically, negligence as a basis for liability in lawsuits by employees against employers has been curtailed through worker's compensation legislation in all states. Negligence today is continually challenged by legislatures and special interest groups who wish to place caps on damages, exempt public entities and public servants from civil responsibility, provide compensation without pointing blame as in no-fault legislation or even prohibit subrogated insurance companies from access to the civil courts.
download this document "The householder who was careless shall make restitution and shall restore to the owner of the property that which was given to him for safekeeping and which he allowed to be lost…"The Laws of Hammurabi, Babylonian king (1792-1750 B.C.)
Under the Laws of Esthunna who predated Hammurabi, when a bailee lost a bailor's goods and there was evidence of a break-in, the bailee did not have to replace the bailor's goods so long as some of the bailee's goods were also taken by the thief. Hammurabi changed that and made the bailee responsible if he was careless whether he lost some of his own goods or not. The evolution of reasonableness in the law was a slow process.
What Is A Bailment?
Consideration of bailment cases require several steps. Before determining whether or not heir was a breach of a bailment contract, there first must be a determination if there is a bailment.
download this document "We have your rights, and the rights of persons entitled to the benefits of this insurance, to recover our payments from anyone liable for the injury. You will do everything necessary to protect those rights for us and to help us enforce them"
Worker's Compensation and Employers Liability Insurance Policy. WC 00 00 00. National Council on Compensation Insurance
INTRODUCTION
The industrial revolution gave birth to "workmen's compensation"- now "worker's compensation." The common law in the 1800s allowed only an injured worker, not his estate, to sue for injuries so there was no cause of action for dead employees. The employer essentially had a duty to supply a safe work place and to warn of any dangers but overall the employer was not responsible. The employee assumed the obvious risk of his job. The employer was not responsible if the employee was contributory negligent or if the injuries were caused by the negligence of a fellow employee. This type of system seemed acceptable in an agricultural society but the industrial revolution brought with it the proliferation of the wok place injury.
The first worker's compensation system appeared in Germany in the late 1800s
and England adopted a system at the turn of the century. These systems permitted the employee to be compensated regardless of whether the employer was negligent or not. Several attempts to pass similar laws by states in the early 1900s failed in court tests on the ground that requiring the employer to pay where he was not negligent deprived the employer of due process. In 1911 Wisconsin successfully enacted a worker's compensation statute that allowed an employer to opt out. If the employer opted out, he could be sued but could not raise as a defense to any suit assumption of the risk contributory negligence and fellow employees negligence.
download this document"...in the end you put your trust in people." Steve Hall, Prudential Subrogation
"Through These Doors Pass the Best Subro People in the World."
Every day, fifty of the world's best subro people pass under this welcome sign at the centralized recovery unit of the Prudential Property and Casualty Insurance (Prupac) subrogation office located in an attractive business park in Horsham, Pennsylvania. Prudential Financial is a major presence in this area as many of you who have traveled the Pennsylvania turnpike from New Jersey to King of Prussia, Pennsylvania know. The Prudential Financial complex dominates the landscape as you travel the turnpike just before the Fort Washington exit. "Big" is the word that comes to mind as I walk from my car across the huge parking lot to one wrong entrance after another until I reach the main entrance. A computer check by a helpful receptionist shows that I'm in the wrong building to visit Albert S. Hall, CPCU, AIC, SCLA, AIM, FCLS, CPD (Steve) and his subrogation department. Back in the car and a two minute drive being careful to not run over some wandering Canadian geese and I'm at the right building. Again after electronic entry into the building, I'm greeted by two other pleasant receptionists and directed to the top of the steps where I'm met by Steve's receptionist and escorted into the conference room. There I sit in the same chair that the president of Prupac sat when he visited a few months before to demonstrate upper management's commitment to the world's best subro people's efforts to increase subrogation recoveries for the company. I'm here to learn as much as I can about how a leading company operates its subrogation department. I had the pleasure to meet Steve Hall at a National Association of Subrogation Professional's conference and was impressed that here was an insurance professional who truly understood subrogation and whose observations and experience could be helpful to all subrogation professionals. Steve has kindly permitted me to pick his brains as well as those of his unit manager, Bonnie Davis and litigation manager, Karen Kinn.
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