In Workers' Compensation claims that also involve a third party tort claim that can be brought by or on behalf of the injured worker, such as an injury arising out of an automobile collision caused by a third party, the Employer/Insurer has a statutorily granted right of subrogation for Workers' Compensation benefits paid. The framework for the subrogation rights of the Employer/Insurer in this context is found in O.C.G.A. Sec. 34-9-11.1.
This statute grants the Employer/Insurer a subrogation lien, not to exceed the amount of compensation actually paid by the Employer/Insurer, against any recovery by the Employee/Claimant in such a third party action. The Employer/Insurer can only recover the amounts that are the subject of its subrogation lien if the injured employee has been fully compensated for all economic and noneconomic losses incurred as a result of the injury. O.C.G.A. Sec. 34-9-11.1(b) and (c).
The ability to file suit against the responsible third party in such an action resides exclusively in the Employee/Claimant for the first year after the injury. If no suit has been filed at the end of one year, either the Employer/Insurer or the Employee/Claimant may file suit during the second year, up until the running of the applicable two year statute of limitations. Either can intervene in a lawsuit brought by the other on the third party claim. O.C.G.A. Sec. 34-9-11.1(b) and (c).
The North Georgia workers' compensation attorney representing an Employee/Claimant in this context should familiarize himself with this statute and with the case law interpreting the Employer/Insurer's right of subrogation, whether or not the attorney is representing the injured worker in the third party action. As a practical matter, there are ways to defeat or negotiate substantially downward the Employer/Insurer's right of subrogation in this context.