Recent Subrogation Ruling
September 11, 2018
With few exceptions, Pennsylvania workers are covered by the Pennsylvania Workers’ Compensation Act. The Act provides injured workers with compensation for injuries they sustain at work, regardless of who was at fault. In exchange for this expedited, no-fault recovery, employees give up their right to sue their employer.
No-Fault Workers’ Compensation
Therefore, an injured worker does not need to show that his or her employer’s negligence caused their work-related injuries in order to claim workers’ compensation. As long as the injury is work-related, employees may be eligible for medical expenses, lost wages, and other forms of workers’ compensation benefits, depending on the nature of the injury.
However, if someone other than the injured worker’s employer is at fault for the injury, the injured worker may be able to recover additional compensation by filing a third-party claim. To prevail, the worker must show that the third party’s negligence caused their injuries.
Whereas workers’ compensation provides for a worker’s medical expenses, lost wages, rehabilitation, and other expenses associated with the injury, a third-party personal injury lawsuit allows for noneconomic damages, such as pain and suffering, emotional distress, and loss of companionship.
Current Subrogation Law
In Pennsylvania, workers’ compensation insurers have an absolute right to subrogation. Subrogation is a legal doctrine that prevents double recovery and ensures that the negligent party is held liable for the injury. Under the doctrine, a worker’s compensation carrier may subrogate the amount of a third-party recovery.
Therefore, if an injured worker recovers damages for their injuries in a third-party suit, the workers’ compensation carrier may get money back for all damages paid.
Is Subrogation Fair?
Critics argue that the current application of the Act promotes unjust enrichment. As applied, the statute deprives workers of their constitutional right to compensation from a negligent party, and results in a windfall for workers’ compensation carriers. Some states, including Ohio, have struck down workers’ compensation subrogation statutes to prevent carriers from receiving double recoveries.
Pennsylvania Supreme Court Decision
The Pennsylvania Supreme Court recently made a progressive ruling in Whitmoyer v. Workers’ Compensation Appeal Board. The court held that when an injured worker settles a third-party case, the carrier is not entitled to assert a future credit on projected medical benefits. In doing so, the court reversed a law that allowed carriers to get installments of compensation, including future wage loss payments and future medical expenses.
Now, carriers will no longer be able to subrogate future medical expenses, since the court ruled that they are not considered “installments of compensation” under the meaning of Section 319 of the Act.
The court stated that an accrued subrogation lien encompasses compensation payments for both disability benefits and medical expenses made by the employer prior to the third-party settlement. Critics of the current subrogation law are hopeful that the court’s failure to mention or define noneconomic damages as compensation inspires future challenges to the current scheme.
Philadelphia Work Injury Lawyers at Larry Pitt & Associates, P.C. Represent Injured Workers in Third-Party Claims
If you have been injured at work, contact a Philadelphia work injury lawyer at Larry Pitt & Associates, P.C. We can help you get the maximum recovery for your injuries. Our experienced attorneys represent clients throughout Pennsylvania, including those in Berks County, Bucks County, Chester County, Delaware County, Montgomery County, and Philadelphia County. For a free consultation, call us at 888-PITT-LAW or complete our online contact form.
Our legal team provides skilled representation to those residing in and around Abington, Ambler, Ardmore, Bala Cynwyd, Bensalem, Clifton Heights, Crum Lynne, Darby, Downingtown, Doylestown, Drexel Hill, Essington, Folcroft, Glenolden, Haverford, Havertown, Holmes, Kutztown, Lansdowne, Media, Merion Station, Morton, Narberth, Norristown, Norwood, Philadelphia, Prospect Park, Quakertown, Reading, Roxborough, Sharon Hill, Upper Darby, West Chester and Wynnewood.