Subrogation: Are you Leaving Money on the

Table?Presented by Jim Gill

Southwest Risk Services / Berkley Risk Administrators

Are GREAT at◦ Medical lingo ◦ “Forms” lingo◦ Calculating stuff

Are less GREAT at◦ Liability/negligence determinations◦ Being “plaintiff attorneys”!

Work Comp Adjusters

TWO-year statute of limitations for negligence claims vs. private entities◦ Year #1: Claimant has exclusive recovery rights◦ Claimant needs to

Settle and pay the WC lien File a lawsuit Get a reassignment form the WC carrier/self insured

◦ Year #2: WC carrier/self insured has exclusive recovery rights if there was no settlement, suit or reassignment

The Basics of AZ Work Comp Subro

ONE-year statute of limitations for negligence claims vs. public entities ◦ ONLY if you file a statutorily compliant notice of

claim within 180 days after date of loss/discovery of negligence-based damages

Injured worker and WC carrier/self insured’s rights against responsible third parties run concurrently◦ Unless the injured worker settles/repays the WC

lien, or gets a reassignment, or files suit, the WC carrier/self insured needs to file a notice of claim within 180 days and suit within one year

The Basics of AZ Work Comp Subro

…won’t THEY be the ones to figure that out? …won’t THEY be the ones to hire an

attorney and pursue a claim (on which I can assert a lien)?

But If Someone Else’s Negligence Injured My Employee…

Comparative Fault

AZ is a “pure comparative” state◦ If a third party is even 1% at fault for injuring an

employee, they pay 1% of the total damages DON’T assume there’s no recovery potential

just because your injured worker was “mostly” (maybe even 99%) at fault for causing his own injuries.◦ Even 1% of what you’ll pay on a serious injury

claim can be a big number!

Comparative Fault

Duty owed Duty breached Proximate cause Actual damages

Negligence Claims: What Do I Need To Prove?

Auto Claims

Rear-end auto accidents Left turn accidents Failure-to-yield accidents

◦ Other vehicle ran a stop sign or red light◦ Other vehicle emerging from a private drive

Auto Claims: The “Low Hanging Fruit”

What if it looks like your employee caused the accident?

Maybe he/she did…but were they really 100% at fault?◦ What do witnesses say?◦ What does the police report say◦ What do accident scene photos tell you?

Auto Claims: The “Higher Hanging Fruit”

Auto Claims: The “Higher Hanging Fruit”: Intersection Obstructions

Auto Claims: The “Higher Hanging Fruit”: Intersection Obstructions

Auto Claims: The “Higher Hanging Fruit”: Intersection Obstructions

Auto Claims: The “Higher Hanging Fruit”: Improper Signage/Barricades

Premises Claims

If you’re on someone else’s property, you’re either◦ An invitee/business invitee

Invited by the property owner, generally to benefit the owner (i.e., store customers)

Owner has a duty to make the property reasonably safe◦ A licensee

Enters property for his own purpose, or as a social guest, and is present at the consent of the owner, usually for a business purpose

Owner has a duty to warn of known hazards◦ A trespasser

On the property without the owner’s permission Owner has duty not to intentionally injury or set traps

Premises Claims

Determine your employee’s status on the property

Determine what duties the property owner owed the employee

Were those duties breached? Was that breach the proximate cause of

your employee’s injuries?

Premises Claims

Was the property well-lit?

Premises Liability

If there was liquid/debris on the floor, was their a “reasonable” cleaning/maintenance schedule?

Premises Liability

And, did the property owner try to warn of the dangers?

Premises Liability

Were there physical defects that should have been discovered/repaired?

Premises Liability

Were there code violations (stairways, handrails, etc.)?

Premises Liability

Were there prior complaints about conditions? (i.e., was the property owner “on notice” of a dangerous condition?)

Premises Liability

Products Liability

The manufacturer owed a duty to the injured party

The manufacturer breached that duty The breach of duty was the cause of the

injured person’s injuries The injured person suffered actual damages

as a result of the breach

Products Liability

Express warranties◦ Specific claims made about a product

Implied warranties◦ Of fitness for a particular purpose

Products should be fit for normal use and foreseeable misuse

Products Liability

Defenses against product liability claims include:◦ Misuse (non-foreseeable) by the injured party◦ Product alteration (either by the end user/injured

party or by someone in the stream of commerce)◦ Unusual reaction (ex.: a 1-in-a-million allergy or

sensitivity to a medicine, lotion, etc.)◦ Product design/materials were state of the art at

the time of manufacture

Products Liability

Stream of commerce◦ Includes EVERYONE who was involved in the sale

or distribution of a product, starting with the manufacturer

If you are pursuing a products liability claim, the general rule would be to put everyone on notice—and let each party ◦ Document they didn’t alter the product while it

was in their care, custody and control◦ Tender the defense of the claim “upstream”

toward the manufacturer

Products Liability

Products Liability: “Low Hanging Fruit”: Obvious Defects

Products Liability: “Low Hanging Fruit”: Obvious Defects

A product can be “defective” if it has:◦ Improper instructions or safety warnings◦ Improper or missing safety guards/shields◦ Improper or missing safety interlock devices◦ Improper or missing shutoff switches/devices

Products Liability: “Higher Hanging Fruit”

Warnings That Probably Resulted from a Claim…

Warnings that Probably Resulted from a Claim…

Warnings that Probably Resulted from a Claim…

Warnings that Probably Resulted from a Claim…

Warnings that Probably Resulted from a Claim…

Product Safety Devices

Product Safety Devices

Safety Interlock Devices

Safety Interlock Devices

Safety Interlock Devices

Safety Interlock Devices

Was the product safe for regular use and foreseeable misuse?

Were the instructions and warnings sufficient?

Were there appropriate safety interlocks? Were there appropriate shut-off switches?

Products Liability: “Higher Hanging Fruit”

The Plaintiff Attorney Credo

1. If the facts are against you, argue the law

2. If the law is against you, argue the facts

3. If the facts and the law are against you, yell

like hell

Don’t Let Plaintiff Attorneys Intimidate You Into Lien Compromises!

“Our Liability Position is Horrible”(Says the Plaintiff Attorney Looking for a Lien Compromise…)