Understand subrogation and how it might affect your Georgia workers’ compensation claim
Subrogation is defined as the substitution of a person or group by another in respect to a debt or insurance claim, accompanied by the transfer of any associated rights and duties. Subrogation may exist in a workers’ compensation claim where an employee is injured on the job as a result of the negligence of a third party.
If the injured worker receives benefits from their employer/workers’ compensation carrier, then that payor may also have the right to reimbursement from the at-fault party.
History of subrogation law in Georgia
The state of Georgia established its workers’ compensation laws in 1920. At the time of the creation of these laws, there was no mention of subrogation.
In 1922, the legislature enacted a provision specifically allowing employers and their insurance carriers to have the right of subrogation if an injured worker received indemnity benefits from a workers’ compensation carrier and benefits against a third party tortfeasor. This statute allowed the employer or the workers’ compensation carrier to reduce benefits to the injured worker in concert with money received against the third part tortfeasor.[1]
In 1963, the legislature amended the statute to require the employer or the workers’ compensation carrier to provide notice to the injured worker to obtain subrogation.[2] Notice had to be provided in writing to the employee and the third-party tortfeasor. If written notice was not provided to both parties, then there was no right to subrogation.[3]
It should be noted that neither the employer nor the insurance carrier had the right to intervene in the third party action, and that their only remedy was to bring an enforcement action after the liability against the third party had been established.[4]
The Georgia legislature repealed this workers’ compensation subrogation statute in 1972. As a result, the original 1922 law was in effect for 20 years until the legislature passed another subrogation law in 1992, which once again gave employers and workers compensation carriers the right of subrogation.[5] O.C.G.A. 34-9-11(b) gave the right to the employer or the carrier to intervene in any action against a third party to protect and enforce their lien.
However, the statute is explicit in stating that:
(T)he employer’s or insurer’s recovery under this Code section shall be limited to the recovery of the amount of disability benefits, death benefits, and medical expenses paid under this chapter and shall only be recoverable if the injured employee has been fully and completely compensated, taking into consideration both the benefits received under this chapter and the amount of the recovery in the third-party claim. For all economic and noneconomic losses incurred as a result of the injury. (Emphasis added).[6]
Subrogation rulings in Georgia courts
In 2015, a Georgia Court held that if a claimant hadn’t been fully and completely compensated for all economic and noneconomic losses as a result of their injury, then the subrogation lien should be properly denied.[7]
In one particular case, the claimant settled their third party action against the tortfeasor after the employer had intervened in the third party claim. The employer subsequently requested an evidentiary hearing to demonstrate that the claimant had been fully compensated for their pain and suffering as a result of the settlement. It was the employers’ position that they had been made whole for their economic and noneconomic losses.
The Court of Appeals ruled that subrogation in a workers’ compensation claim only extends recovery to economic losses. If there is no definitive statements by the court or in the settlement documents determining what money is for noneconomic, pain and suffering, as opposed to economic losses, then the employer/workers’ compensation insurance carrier cannot enforce their lien. An injured worker must be made whole for the subrogation lien to be enforced in a third-party setting.[8]
Hire an experienced Georgia workers’ comp attorney
Subrogation can be a difficult subject to tackle in the workers’ compensation setting. Many times, you have insurance companies who hire people specifically to attempt to collect subrogation. State laws vary widely, with some states still enforcing a law similar to what Georgia had prior to 1972, or even 1992.
[1] GA. CODE ANN. 114-403
[2] GA. CODE ANN. 114-403
[3] Cobb v. Pacific Employers Ins. Co., 125 Ga. App 546 (1972).
[4] Carpenter v. Newcomb Devilbiss Co., 11 Ga. App. 472 (1965).
[5] O.C.G.A. 34-9-11.1(a)
[6] O.C.G.A. 34-9-11.1(b)
[7] Best Buy Co., Inc. v. McKinney, 334 Ga. App. 42, 778 (2015).
[8] Best Buy Co., Inc. v. McKinney, 334 Ga. App. 42, 778 (2015).
If you have any questions about subrogation or your workers’ compensation rights, don’t hesitate to contact an experienced Atlanta work injury lawyer at Gerber & Holder.
