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 2^nd 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. 

            This sort of case has not yet been brought to other appellate courts or the Ohio Supreme Court, and other questions remain as to specific details of the ruling.  However, the decision is a step in the right direction for self-insured employers, who are on their way to being able to protect their subrogation rights at a more reasonable cost without the worries inherent in having to rely on another party.

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.

However, self-insured employers should be proactive early on and put claimants and third parties on notice of their intent to assert their subrogation rights.  Self-insured employers should also request that claimants and third parties provide them notice of any potential settlements and/or court proceedings.  If the claimant pursues a litigation claim, then self-insured employers should enter an appearance in the court case and protect their subrogation rights. 

If you have further questions regarding this matter, please feel free to contact John F. Burke, III, Amy L. Kullik or Tracey S. McGurk at Mansour, Gavin Gerlack and Manos Co., L.P.A. at (216) 523-1500.