Subrogation is one of the more frustrating and intricate aspects of Fla WC law. In essence, the idea is that a claimant should not be able to “double-dip” and collect money from a liability lawsuit and a WC claim for the same things, like medical benefits and lost wages.
A few basics…there has to be a 3rd party (not the claimant and not the employer) at fault for there to be a liability claim. Commonly we see this in car accidents or deliveries at some other business. For leased/staffing employees, the on-site employer is viewed as if they are the employer, so they don’t count. You can not claim subrogation against the claimant or the employer’s Uninsured Motorists (UM) coverage, because that is not a 3rd party, that’s a claim against their own insurance policy.
Its very important that we put the claimant, the WC claimant attorney, the claimant’s liability atty and the liability carrier on notice of our subrogation lien. At the onset, if they haven’t actually filed a lawsuit in the liability case yet, a letter is sufficient. However, once the claimant actual files the complaint in circuit court, we MUST file a notice of lien in that case or we waive our lien. That applies even if you sent letters.
The recovery formula in Florida is called the Manfredo formula, from the Manfredo case ( Cas. Ins. Co. v. Manfredo, 542 So. 2d 1365 (Fla. 3d DCA 1989),i t has nothing to do with The Godfather). It is complicated, but you use the claimant’s net liability recovery divided by the full value of the case to give you a percentage. You then apply that percentage to the total medical and indemnity payout, and that is what you recover now. However, you also get to recover that same percentage from all future benefits until we claim allllll of the claimant’s net recovery. Clear as mud?
A point to note, the percentages and recoveries are all negotiable. You can take less upfront for a higher recovery percentage if there is a lot more exposure in the WC. Or vice versa, if you have paid out most of your exposure, you can try and get more upfront and waive the future recovery. Think strategically.
We have a full CEU on this topic with lots of math if anyone is interested. As always, let me know if you have any questions.
Morgan Indek | Partner