Subrogation: Are you Leaving Money on the Table?

1. Subrogation: Are you Leaving Money on the Table? Presented by Jim Gill Southwest Risk Services / Berkley Risk Administrators

2. Work Comp Adjusters • Are GREAT at • Medical lingo • “Forms” lingo • Calculating stuff • Are less GREAT at • Liability/negligence determinations • Being “plaintiff attorneys”!

3. The Basics of AZ Work Comp Subro • TWO-year statute of limitations for negligence claims vs. private entities • Year #1: Claimant has exclusive recovery rights • Claimant needs to • Settle and pay the WC lien • File a lawsuit • Get a reassignment form the WC carrier/self insured • Year #2: WC carrier/self insured has exclusive recovery rights if there was no settlement, suit or reassignment

4. The Basics of AZ Work Comp Subro • ONE-year statute of limitations for negligence claims vs. public entities • ONLY if you file a statutorily compliant notice of claim within 180 days after date of loss/discovery of negligence-based damages • Injured worker and WC carrier/self insured’s rights against responsible third parties run concurrently • Unless the injured worker settles/repays the WC lien, or gets a reassignment, or files suit, the WC carrier/self insured needs to file a notice of claim within 180 days and suit within one year

5. But If Someone Else’s Negligence Injured My Employee… • …won’t THEY be the ones to figure that out? • …won’t THEY be the ones to hire an attorney and pursue a claim (on which I can assert a lien)?

6. Comparative Fault

7. Comparative Fault • AZ is a “pure comparative” state • If a third party is even 1% at fault for injuring an employee, they pay 1% of the total damages • DON’T assume there’s no recovery potential just because your injured worker was “mostly” (maybe even 99%) at fault for causing his own injuries. • Even 1% of what you’ll pay on a serious injury claim can be a big number!

8. Negligence Claims: What Do I Need To Prove? • Duty owed • Duty breached • Proximate cause • Actual damages

9. Auto Claims

10. Auto Claims: The “Low Hanging Fruit” • Rear-end auto accidents • Left turn accidents • Failure-to-yield accidents • Other vehicle ran a stop sign or red light • Other vehicle emerging from a private drive

11. Auto Claims: The “Higher Hanging Fruit” • What if it looks like your employee caused the accident? • Maybe he/she did…but were they really 100% at fault? • What do witnesses say? • What does the police report say • What do accident scene photos tell you?

12. Auto Claims: The “Higher Hanging Fruit”: Intersection Obstructions

13. Auto Claims: The “Higher Hanging Fruit”: Intersection Obstructions

14. Auto Claims: The “Higher Hanging Fruit”: Intersection Obstructions

15. Auto Claims: The “Higher Hanging Fruit”: Improper Signage/Barricades

16. Premises Claims

17. Premises Claims • If you’re on someone else’s property, you’re either • An invitee/business invitee • Invited by the property owner, generally to benefit the owner (i.e., store customers) • Owner has a duty to make the property reasonably safe • A licensee • Enters property for his own purpose, or as a social guest, and is present at the consent of the owner, usually for a business purpose • Owner has a duty to warn of known hazards • A trespasser • On the property without the owner’s permission • Owner has duty not to intentionally injury or set traps

18. Premises Claims • Determine your employee’s status on the property • Determine what duties the property owner owed the employee • Were those duties breached? • Was that breach the proximate cause of your employee’s injuries?

19. Premises Liability • Was the property well-lit?

20. Premises Liability • If there was liquid/debris on the floor, was their a “reasonable” cleaning/maintenance schedule?

21. Premises Liability • And, did the property owner try to warn of the dangers?

22. Premises Liability • Were there physical defects that should have been discovered/repaired?

23. Premises Liability • Were there code violations (stairways, handrails, etc.)?

24. Premises Liability • Were there prior complaints about conditions? (i.e., was the property owner “on notice” of a dangerous condition?)

25. Products Liability

26. Products Liability • The manufacturer owed a duty to the injured party • The manufacturer breached that duty • The breach of duty was the cause of the injured person’s injuries • The injured person suffered actual damages as a result of the breach

27. Products Liability • Express warranties • Specific claims made about a product • Implied warranties • Of fitness for a particular purpose • Products should be fit for normal use and foreseeable misuse

28. Products Liability • Defenses against product liability claims include: • Misuse (non-foreseeable) by the injured party • Product alteration (either by the end user/injured party or by someone in the stream of commerce) • Unusual reaction (ex.: a 1-in-a-million allergy or sensitivity to a medicine, lotion, etc.) • Product design/materials were state of the art at the time of manufacture

29. Products Liability • Stream of commerce • Includes EVERYONE who was involved in the sale or distribution of a product, starting with the manufacturer • If you are pursuing a products liability claim, the general rule would be to put everyone on notice—and let each party • Document they didn’t alter the product while it was in their care, custody and control • Tender the defense of the claim “upstream” toward the manufacturer

30. Products Liability: “Low Hanging Fruit”: Obvious Defects

31. Products Liability: “Low Hanging Fruit”: Obvious Defects

32. Products Liability: “Higher Hanging Fruit” • A product can be “defective” if it has: • Improper instructions or safety warnings • Improper or missing safety guards/shields • Improper or missing safety interlock devices • Improper or missing shutoff switches/devices

33. Warnings That Probably Resulted from a Claim…

34. Warnings that Probably Resulted from a Claim…

35. Warnings that Probably Resulted from a Claim…

36. Warnings that Probably Resulted from a Claim…

37. Warnings that Probably Resulted from a Claim…

38. Product Safety Devices

39. Product Safety Devices

40. Safety Interlock Devices

41. Safety Interlock Devices

42. Safety Interlock Devices

43. Safety Interlock Devices

44. Products Liability: “Higher Hanging Fruit” • Was the product safe for regular use and foreseeable misuse? • Were the instructions and warnings sufficient? • Were there appropriate safety interlocks? • Were there appropriate shut-off switches?

45. Don’t Let Plaintiff Attorneys Intimidate You Into Lien Compromises! The Plaintiff Attorney Credo • 1. If the facts are against you, argue the law • 2. If the law is against you, argue the facts • 3. If the facts and the law are against you, yell like hell

46. “Our Liability Position is Horrible”(Says the Plaintiff Attorney Looking for a Lien Compromise…)