Sunday, January 29, 2012

PA Subrogation Rules of Thumb- Part I

Subrogation in Pittsburgh personal injury cases can be a thorny issue for attorneys to deal with in the best interests of their clients. Every year the PA Association for Justice puts out a great book called “Personal Injury Subrogation Handbook” authored by attorneys Timothy Shollenberger and Wilhelm Mabius. The book lays out the current state of subrogation in Pennsylvania personal injury law for several specific areas. In an effort to provide a distillation of the concepts discussed in this book I will try and put together basic “Rules of Thumb” on Pennsylvania Subrogation based upon my reading of the Handbook. By no means to I profess to be any type of an expert in this area of law. From my perspective, it is something we are forced to deal with that I want to understand as simply and straightforwardly as possible. If I write anything that is not entirely accurate, please let me know and I will make changes.

Subrogation is the right of legal substitution. Subrogation commonly arises when one party is required to indemnify (cover someone else for a loss) another or else face legal liability. There are typically three parties involved in subrogation: 1. “Subrogor” the party initially injured; “Subrogee” the party who compensates the subrogor for the injury and then succeeds to the rights of the subrogor; and the “Third Party”the person or entity that caused the injury to the Subrogor and who the Subrogee seeks to hold responsible for repayment.

Subrogation in Motor Vehicle Cases:

Determined by the Motor Vehicle Financial responsibility Law (MVFRL) 75 Pa.C.S.A. §1720. the MVFRL holds that in Pennsylvania, there is no right of subrogation or reimbursement.

Exceptions- The following entities may have a right of subrogation, despite MVFRL:

1.  Federal Program- Medicare
2.  State Prgram- Medicaid/DPW; employer’s self-funded ERISA plan; HMOs and plans governed by the 3.  Federal Employees Benefits Act
4.  Workers’ Compensation
5.  Out-of-state health insurers

Workers Compensation:


Pennsylvania employers have a right of subrogation in the context of workers’ compensation in the following scenarios:

1.  Motor Vehicle Accidents
2.  Products liability claims
3.  Medical Malpractice Claims
4.  General Negligence Claims
5.  Legal Malpractice Claims

Employers are governed by 77 P.S. § 671 and, to establish a right of subrogation, requires proof that:

1.  Employer was compelled to make comp payments as a result of a third party’s negligence; and
2.  The fund from which it seeks subrogation was for the same compensable injury for which it paid/was liable under the Workers Comp Act.

I will discuss cases involving Medicare, Political Subdivisions, Medical Malpractice and much more in my next few posts.

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