Subrogation for the Claims Examiner - Part 2

Sunday, June 23, 2002 | 0

In our last article we introduced subrogation and noted the focus of subrogation was purely a cost/benefit analysis. Now we will review some of the more technical aspects of subrogation.

Think subrogation if the work injury arose out of or was related to any of the following situations:

-Motor vehicle accident (MVA)
-Slip/trip and fall (any fall)
-Construction site
-Product or machine accidents
-Dogs
-Violence
-Toxic Exposure
-Electric Shock and Burns

Most states have statutes that set forth the rights and obligations of stakeholders to a subrogation claim. Subrogation, though arising out of workers' compensation law, is a civil remedy, and is thus controlled to a large extent by the Code of Civil Procedure as well as the more strict evidentiary requirements in the civil courts. Evidence standards are higher, statutes of limitations are more strictly construed, formal pleadings are necessary and subject to early defeat for imperfections, causation is a necessary element and liens provide little protection.

Investigation is the foundation of the subrogation case. Build your case early to protect the evidence. Get testimony in the way of statements or under penalty of perjury. Get inspections early, photograph or take video of the accident scene and any products/vehicles that may have been involved in the accident. Documentary evidence needs to be retained and protected. If there was a police investigation, a copy the report is very important.

Other items that cannot be overlooked in your investigation include employee training tools, maintenance records, operators manuals, and contracts. All of these items can or will define liabilities and/or obligations.

Your investigation needs to include the following questions:
Who caused the injury?
Where did it happen?
What happened?
Why did it happen? (How could it have been prevented? Who or what else contributed to the accident? How bad is the injury? Even minor injuries often become serious and expensive.)

The point is do the investigation now- it may not be possible later on!

Remember in subrogation there are two types of recovery: cash and at least in California, credit.

: Credit will allow you to offset workers' comp liability but is only available for 'Net in Pocket' recovery. Credit must be ordered by a WC Judge to be effective, but on the positive side, can only be reduced by employer negligence. Credit can be great help in closing the comp case or reducing your overall exposure.

Finally, don't forget about employer negligence. Employer negligence, typically not a question in a workers' compensation case, means that the employer was a contributing cause of employee's accident. You need to ask "How much of the accident was the employer's fault?".

The percentage of employer's negligence can extinguish your credit rights. Typical sources of employer fault will be lack of supervision; lack of training; or poor maintenance of tools, machines, and premises.

Subrogation requires different skills and different analysis, but can reward the diligent claims examiner with improved results.

in charge of Training for Cambridge International. She can be reached at ckcyndi_koppany@cisgi.com.