Montgomery & Bucks County Workers' Compensation Law Blog

Wednesday, June 17, 2015

Recent Pennsylvania Supreme Court Ruling Limits Subrogation of Workers’ Compensation Claims Against Negligent Third-Party

What happens if I am injured at work, but my injury was caused by the negligence of another worker? 

Workers’ compensation coverage offers a sense of security to workers across Pennsylvania. However, these claims can quickly become marred by procedural complexities and conflict with the insurance company – as in a recent Pennsylvania Supreme Court case involving an injured worker whose accident was caused by the negligent acts of a co-worker or third party entity. Prior to this case, Pennsylvania laws were somewhat unclear as to the rights and obligations of a workers’ compensation insurer when the payee was actually injured by someone else. However, the holding in Liberty Mutual Insurance Co. v. Domtar Paper Co. et al. shed some interesting legal light on the issue – much to the dismay of both insurers and employers, who came out primarily on the losing end. 

Facts & Procedure of Domtar

The Domtar case began in 2009 when an employee for a trucking company known as Schneider National fell in a parking lot leased by paper company Domtar Corporation. The employee filed a workers’ compensation claim with Schneider National, and was paid over $30,000 for his injuries. In turn, Schneider National, through its insurer Liberty Mutual Insurance Company, alleged that Domtar was negligent in its maintenance of the parking lot, resulting in injury to the employee. However, the employee did not individually pursue a claim against Domtar and refused all attempts both by Liberty Mutual and Schneider National to file a negligence lawsuit against the paper company. 

As a result, Liberty Mutual filed a claim against Domtar itself, alleging negligence resulting in injury to the employee. In response, Domtar asserted that the insurer had no right to file an independent claim for damages on behalf of the injured employee who did not pursue his own right to file an action. The trial court agreed with Domtar, and the case was appealed to Superior Court, which also agreed. 

As a last resort, Liberty Mutual filed an appeal with the Pennsylvania Supreme Court, which affirmed the lower courts’ rulings for several different reasons: 

• Both Liberty Mutual and Schneider National failed to get the employee’s cooperation in the matter. In other words, it is technically not their fight. 
• Liberty Mutual did not properly “perfect” the subrogation (reimbursement) claim, nor did it follow proper procedural frameworks to pursue its assertions. 

As a result of Domtar, Pennsylvania precedent stands (somewhat) clearly for the notion that an insurer may not pursue reimbursement of a compensation claim without the involvement of the actual injured party – and it better follow proper procedures when it does. 

If you are having a difficult time with your workers’ compensation claim or appeal, please contact the Montgomery and Bucks County workers compensation attorneys at Louis P. Lombardi II & Associates by calling (610)239-7600. 

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