Subrogation may apply where the injured worker has a "third party action" as a result of the injury. A "third party action" exists when a worker suffers an injury in the course of their employment which gives them a right to workers' compensation benefits and also gives them a right to sue a third party for a personal injury, in addition to the workers' compensation claim. The personal injury claim is referred to as the "third-party action".
Subrogation means that the Bureau of Workers' Compensation or Self-Insured Employer is entitled to seek reimbursement from the "third party action" against any workers' compensation benefits paid to the injured worker. In Ohio, the State Legislature has determined that there should be no "double" recovery and therefore permits the BWC claim to be subrogated to the "third party action".
If an employee is injured due to the tortious actions of a third party, the Ohio subrogation statute, R.C. 4123.931, provides the self-insured employers (or the Bureau of Workers’ Compensation) with an absolute right of subrogation against any payment made by a tortfeasor to an injured party, whether that payment is the result of settlement or a judgment after a trial.
As a result, employers are able to recover their costs when the injury is due to another party. The statute also gives the self-insured employer the right to file its own claim against the tortfeasor, whether or not the employee chooses to do so. R.C. 4123.931(H).
The concern employers have faced is when do they have to file a subrogation claim. Recently, in Corn v. Whitmere, the 2nd App. Dist. Ct. determined an employer is not bound by the two-year statute of limitations of R.C. 4123.931(H), but rather by the six-year statute of limitations for oral contracts and actions arising upon a liability created by statute. The result is that self-insured employers no longer have to file their own cases against tortfeasors within the two-year statute of limitations and no longer must coordinate with the employee’s counsel to ensure that the employer is added as a party to the lawsuit.
Practically speaking, R.C. 4123.931(G) requires a claimant to notify a self-insured employer of the identity of all third parties against whom the claimant has or may have a right of recovery. No settlement, compromise, judgment, award, or other recovery in any action or claim by a claimant is final unless the claimant provides the self-insured employer with prior notice and a reasonable opportunity to assert its subrogation rights. If a self-insured employer is not given notice, or if a settlement or compromise excludes any amount paid by the self-insured employer, the third party and the claimant shall be jointly and severally liable to pay the self-insured employer the full amount of the subrogation interest.
As a result, there may be instances where pursuing a "third party action" is not worthwhile because the BWC and/or the Self Insured Employer will not assist in any litigation expenses that might be necessary to obtain the "third party recovery".
However, on January 14, 2011, the Ohio Sixth Appellate Division issued a decision in the case of State of Ohio Bureau of Workers' Compensation v. Dernier, Court of Appeals No: L-10-1126, in which it held that a 3rd party tort claim which is settled before the filing of an Ohio Workers' Compensation claim is not subject to subrogation by the OhioBWC (which would also be the same if the injured worker was employed by a self-insured employer).
So, if it is at all possible, should you be the victim of a 3rd party negligence action while you were on the job, you should seek settlement of the 3rd party tort claim prior to filing a claim for OhioBWC benefits.
There are time limits, so you should consult with a Board Certified Ohio Workers' Compensation Specialist Attorney before you say or do the wrong thing. Mike Gruhin is a Board Certified Ohio BWC Specialist Attorney. Call now for a free, no obligation consultation. Have your Ohio Workers' Compensation Claim questions answered by n OhioBWC specialist lawyer.
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