When it comes to workers’ compensation claims, one of the more complicated and overlooked (possibly due to its difficulty) issues is subrogation. This combination of challenges is only made more daunting when it comes to subrogation under the Workers’ Compensation Act in Georgia. Over the years, subrogation in Georgia has developed a nasty reputation that is not without its merit. Despite that, I am hopeful that this brief summary of the various issues affecting subrogation in Georgia not only make the relevant law clearer, but also much less daunting.
The first major challenge that arises with subrogation in Georgia comes before we even get to the point of attempting to recover for expenses, and that is the result of geography. Specifically, Georgia’s location in the United States can inherently cause some problems, as it borders 5 different states. Further, many of these borders are very close to relatively large metropolitan areas, such as Jacksonville, Tallahassee, Savannah, Augusta, Columbus, and Chattanooga. With that in mind, it is very easy for a workers’ compensation claim to arise from an accident in Georgia, while the Claimant and/or Employer are located out of state, or for a Georgia resident to be involved in an out of state work accident.
In these cases, location and procedure can serve as a threshold issue when it comes to subrogation. In many cases, even when a workers’ compensation claim involves Georgia, it may not be entitled to subrogation in this state. Specifically, Georgia law only allows for subrogation in cases where the workers’ compensation claim comes under its own statute. Therefore, an insurance provider may only seek subrogation under Georgia law for cases in which the underlying workers’ compensation claim was brought in the state.
Even when a workers’ compensation claim is brought under Georgia law, there are still several procedural considerations that must be made. First, you must consider how involved in litigation you would like to be. Specifically, this centers on a third-party tort claim (typically between the claimant and another driver, as the most common cases that are subject to subrogation result from motor vehicle accidents).
Under Georgia law, following a work injury a claimant has a 2-year period in which to bring his third-party case. Upon bringing this case, we then have the option to intervene in order to seek subrogation. Upon doing so, we as insurers are then permitted to bifurcate the third-party case, meaning that general damages and subrogation will be tried separately with a new jury. While it is certainly possible to negotiate an agreement with the claimant’s attorney regarding subrogation, it is important to note that, in order to preserve the right to reimbursement, an insurer must intervene in the third-party claim before it reaches the point of settlement.
Even if a claimant does not decide to bring a third-party case of their own, there is still an option for insurers to take in order to preserve their right to recovery under subrogation. In that case, we have the option to bring our own suit against the at-fault party or parties, or their insurance provider in the case of motor vehicle accidents. In those cases, as we are the party bringing the suit, we take the role of the plaintiff, essentially acting on behalf of the Claimant who chose not to sue. Despite that, the legal standard for subrogation in Georgia remains the same regardless of whether we are intervening in the case or bringing it ourselves.
Speaking of the legal standard, this is the element of subrogation in Georgia that elicits the most fear among insurers, as it is notoriously hard to meet. Specifically, Georgia law requires that an Employer/Insurer prove that the Claimant has been “made whole,” or more specifically has been “fully and completely compensated” by their award from the other party in order to seek subrogation. Further, the Employer/Insurer must also be able to show the court what portion of the award compensates actual damages (such as expenses) versus non-economic damages (such as pain and suffering), as it is not permissible to recover subrogation from non-economic damages.
Ultimately, this sets up a situation where it is extremely difficult to recover anything regarding subrogation through the Georgia courts. This comes down to the fact that, put simply, insurers are required to prove that, from any settlement or verdict, the claimant has received more money that is necessary to compensate them from their injury. At this point, the insurer can only recover reimbursement from the excess. All of this combines to create a situation where judges and juries are extremely hesitant to award any reimbursement through subrogation.
Beyond the difficulty created by the “made whole” standard alone, Georgia law goes further to make subrogation more difficult in the infrequent cases that reach the point of insurers making this argument. In doing so, the law is situated in such a way to target the most common instance of cases in which subrogation is possible, motor vehicle accidents. To do this, Georgia law has set out that a party cannot be “fully and completely compensated” if there is any degree of contributory negligence.” Put simply, if the just finds that any percentage of the motor vehicle accident (or any other injury) was the fault of the Claimant, then we cannot recover anything through subrogation.
All of this combines to create a situation where subrogation in Georgia seems extremely challenging to say the least. I did promise at the beginning of this article, though, that I would try to make it all seem less daunting. Hopefully, this is the part of the article where I can try to do that.
It is important to remember that, in almost every interest, when it comes down to it the law is a lot more complicated than winning or losing. In most workers’ compensation situations, we see this very frequently. While paying money to a claimant may not be as exciting as winning outright in front of a judge, in many cases settlement is functionally a win given the exposure and litigation costs involved in taking a claim to verdict.
This is the lens that we need to view subrogation through, except when trying to recover we have essentially turned the table. Intervening in a case provides us with leverage. It allows us to drag out the litigation and serve as a stumbling block to a claimant receiving their money, if not an outright threat. While we may have a significant challenge in recovering the full amount of a lien under Georgia law, simply getting in the way can be enough to force a settlement. Further, if the workers’ compensation claim is still open, the ability to waive subrogation can serve as a significant bargaining chip to settle some of the more frustrating, dragged-out claims.
With that being said, I hope that this brief article has helped to make many of the issues regarding subrogation in Georgia clearer, and hopefully it has alleviated some of the fears that come along with how challenging it may seem on its face. If you have any other questions about subrogation for Georgia workers’ compensation claims, please feel free to give me, or any of my colleagues in the Atlanta office a call. We would be more than happy to assist you.