Personal injury lawsuits are an everyday legal battle in the United States, with thousands of cases filed yearly. In fact, according to the National Center for State Courts, personal injury lawsuits account for roughly 14% of all civil cases filed in state courts across the country. However, navigating the legal system can be complex, especially when subrogation is involved. In this guide, we'll examine the basics of subrogation, how it can impact personal injury lawsuits, and the legal resources available to help you protect your interests.
What Is Subrogation?
Subrogation is the legal right of an insurance company to pursue a claim against a third party that caused injury or damage to their insured party. For example, in a personal injury lawsuit, subrogation occurs when an insurance company pays for medical expenses or other damages resulting from an injury caused by a third party and then seeks to recover those costs from the person or entity responsible for the injury.
To illustrate, if you were injured in a car accident caused by another driver, your health insurance company may pay for your medical expenses. However, if you win a settlement or judgment against the other driver, your health insurance company may seek reimbursement for the costs they paid on your behalf. This is known as subrogation.
Suppose an employee is injured and receives workers' compensation benefits. In that case, their employer's insurance company may have a right to subrogation against a third party whose negligence caused the injury. To illustrate, if an employee is injured in a car accident while driving for work, their employer's workers' compensation insurance company may seek reimbursement from the at-fault driver's insurance company.
Subrogation can be complex and vary by jurisdiction and insurance policy. Therefore, it is essential to understand your insurance policy and consult with a personal injury attorney if you are involved in a lawsuit where subrogation is a factor.
What Is a Collateral Source?
When someone is injured in an accident and files a lawsuit seeking compensation from the person or entity that caused the injury, they may have received payment or benefits from other sources, such as health insurance or workers' compensation. These payment sources are called collateral sources because they are separate from the balance sought in the lawsuit.
The health insurance company is considered a collateral source if, for example, someone is injured in a car accident and the insurance company covers their medical treatment. This is because health insurance pays for the medical treatment independently of the compensation the injured person may receive from the driver.
Collateral sources are essential in a personal injury lawsuit because they can affect the compensation to which the injured person is entitled. Depending on the laws of the state where the case is filed, the defendant may be able to argue that the injured person has already received compensation from a collateral source and should therefore receive less compensation from the defendant.
Collateral Source Compensation by State
In California, Illinois, New York, and Texas, the law prohibits defendants from using collateral source compensation to reduce the damages they are liable for. The idea behind this rule is to prevent the defendant from benefiting from the fact that the injured person had insurance coverage or other sources of compensation for their injuries.
Other states may allow evidence of collateral source compensation to be introduced in a personal injury lawsuit. Still, they may limit the amount the defendant can reduce their liability for damages. For example, some states may allow the defendant to introduce evidence of collateral source compensation, but only to the extent that it exceeds the plaintiff's out-of-pocket expenses.
Will Subrogation Actions Affect My Personal Injury Claim?
If a subrogation claim is successful, it can reduce the compensation you receive from the at-fault party in your personal injury lawsuit. However, it's important to note that the rules and regulations surrounding subrogation claims can be complex and vary by state and type of insurance policy. For example, in some cases, you may be required to pay back the total amount of the subrogation claim, while in other cases, the subrogation claim may be reduced or waived entirely.
This is why it's crucial to have a personal injury attorney experienced in dealing with subrogation claims on your side. An attorney can help you navigate the complex legal issues involved in subrogation and ensure you receive the maximum compensation possible from your personal injury claim.
Additionally, if you must pay back a subrogation claim, an attorney can negotiate with the claimant to reduce the amount owed or set up a payment plan. This can help alleviate the financial burden of paying back the subrogation claim all at once.
Personal Injury Lawsuit Subrogation Example
Suppose you are injured in a car accident caused by another driver. As a result of the accident, you require medical treatment and incur expenses totaling $50,000. Fortunately, you have health insurance through your employer that covers these expenses.
You file a personal injury lawsuit to recover damages for your injuries and medical expenses. During the case, your health insurance company contacts you and informs you that they have paid $40,000 of your medical costs and are asserting a subrogation claim for this amount.
This means that your health insurance company is seeking to be reimbursed for the $40,000 they paid for your medical expenses, as they believe the at-fault driver should be responsible for paying these expenses. If the subrogation claim is successful, you may be required to pay back the $40,000 out of any damages you recover in your personal injury lawsuit.
Legal Resources for Injured Folks
You may face a long road to recovery if you've been injured in an accident. But while dealing with medical bills and lost wages, you may also grapple with a legal battle. Whether you're filing a personal injury lawsuit or defending against a subrogation action, navigating the legal system can be overwhelming. Fortunately, various legal resources are available to help you through the process. Here are some essential legal resources to consider if you require legal assistance for a personal injury lawsuit or subrogation action.
The National Highway Traffic Safety Administration
The National Highway Traffic Safety Administration (NHTSA) can offer valuable resources to individuals involved in personal injury lawsuits or subrogation actions related to a vehicle accident. They provide information on vehicle safety, crash test ratings, safety features, and vehicle recalls, which can help identify any potential safety issues that may have contributed to the accident. In addition, the NHTSA is responsible for developing and enforcing traffic safety regulations, and their experts can provide testimony in court related to vehicle safety and accident reconstruction.
While the NHTSA cannot provide legal advice or representation, its resources can help individuals and their attorneys build a stronger case in personal injury or subrogation cases related to vehicle accidents.
Consumer Product Safety Commission
For those involved in personal injury lawsuits or subrogation actions related to defective or dangerous products, the Consumer Product Safety Commission (CPSC) can offer helpful resources. For example, the CPSC provides safety alerts, recalls, and product testing information that can help identify safety issues that may have contributed to the injury. In addition, they develop and enforce regulations and standards for consumer products, which can be important in determining liability in a personal injury or subrogation case related to a defective product. Equally important, the CPSC employs experts in product safety who can provide expert testimony in court related to the cause of the injury and determining liability.
State Bar Associations
A local bar association can assist people involved in personal injury lawsuits or subrogation actions by providing referrals to attorneys, legal education, and mediation or arbitration services. They often maintain directories of attorneys in various practice areas, including personal injury law, and can connect individuals with attorneys who can help with their cases. Additionally, some bar associations provide legal education seminars or offer resources related to personal injury law on their website. Medication and arbitration services may also be available, which can help parties settle the dispute more efficiently and cost-effectively.
To find your state’s bar association, view the directory available from the American Bar Association or search online for “[your state] bar association.”
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