Black’s Law Dictionary defines subrogation as: “The substitution of one party for another whose debt the party pays, entitling the paying party to rights, remedies, or securities that would otherwise belong to the debtor.”1 In simpler terms, it is the right to reimbursement.
In the context of a personal injury case, subrogation is the process by which the Plaintiff advances claims to recover the cost of benefits or services that were provided or will be provided to her by a third party (the “subrogating entity”) as a result of her injuries. The right to subrogate (i.e. to be reimbursed) arises by virtue of contract or statute. Although the subrogating entity is not named as a Plaintiff in the lawsuit, its claims essentially “piggy back” onto those claims advanced personally by the Plaintiff. When the Plaintiff recovers the value of the subrogated claim from the Defendant, the money flows through the Plaintiff to the subrogating entity. In regards to past subrogated claims, as with other claims for past losses, pre-judgment interest applies.
The importance of understanding subrogated claims cannot be understated, especially since it is possible for these claims to reach hundreds of thousands dollars. The failure to advance a subrogated claim can have serious consequences for the Plaintiff, personally, and for Plaintiff’s counsel. The purpose of this paper will be to canvass some of the key considerations for Plaintiff’s counsel in the management of subrogated claims.
View PDF of paper: Managing Subrogated Claims in Personal Injury Actions
In addition to the paper is a Subrogation Checklist that ought to provide a quick-glace summary of the key considerations of which Plaintiff’s counsel ought to be mindful in order to successfully protect the client and properly advance a subrogated claim.