One of the unique quirks of California workers’ compensation law is that insurance carriers cannot subrogate against medical malpractice lawsuits.
The issue is codified in California Civil Code section 3333.1, which states in relevant part as follows:
“(a) In the event the defendant so elects, in an action for personal injury against the health care provider based upon professional negligence, he may introduce evidence of any amount payable as a benefit to the plaintiff as a result of the personal injury pursuant to the United States Social Security Act, any State or Federal Income Disability or Workers’ Compensation Act, any health, sickness or income-disability insurance, accident insurance that provides health benefits or income-disability coverage, and any contract or agreement of any group, organization, partnership, or corporation to provide, pay for, or reimburse the cost of medical, hospital, dental, or other healthcare services. Where the defendant elects to introduce such evidence, the plaintiff may introduce evidence of any amount which the plaintiff has paid or contributed to secure his right to any insurance benefits concerning which the defendant has introduced evidence.
(b) No source of collateral benefits introduced pursuant to subdivision (a) shall recover any amount against the plaintiff nor shall it be subrogated to the rights of the plaintiff against a defendant.”
The Civil Code specifically states that a third-party payer, which workers’ compensation is considered, cannot subrogate in medical malpractice suits.
The purpose of Civil Code section 3333.1 was to reduce skyrocketing health costs by lowering overall judgments, which would in turn reduce the cost of malpractice insurance. The goal at the time was to protect the California health care delivery system. The fact that the statute effectively grants a double recovery to a plaintiff employee injured via malpractice was more of a side effect of the initial goal of the legislation, which was again to reduce doctors’ costs.
In any event, Civil Code section 3333.1 bars a workers’ compensation insurance carrier from asserting a lien against an individual employee’s medical malpractice recovery and bars a carrier’s right to file a subrogation complaint against a health care provider for medical malpractice.
Please note that although a workers’ compensation insurance carrier cannot pursue subrogation in a medical malpractice case against a healthcare provider, the carrier can pursue a products liability case involving machinery or equipment.
The carrier must first investigate to see if the employee was injured by a product on the employer’s premises, including the healthcare provider’s premises. Thereafter, the carrier must obtain the following information: type of equipment, maintenance records, information regarding the training the injured worker may have received for operating the equipment, pictures of the product, and Cal-OSHA reports if any.
Most importantly the employer must secure the equipment and not tamper with it after the accident. The employer should also consider hiring an expert to immediately evaluate the equipment, which could prove to be quite helpful later on.
In conclusion, remember that the California Civil Code bars workers’ compensation carriers from subrogating against medical malpractice lawsuits, but does still allow them to subrogate against products liability cases. If a malfunctioning machine is involved, take immediate action to secure it from any tampering and consider hiring an expert to evaluate it – it may just save a whole lot of money.
If you have questions about subrogation or any other topic involving workers’ compensation claims, feel free to contact Peter V. Fitzpatrick. As a partner at Bradford & Barthel, LLP, Mr. Fitzpatrick has garnered nearly 20 years in workers’ compensation defense with a heavy focus on all aspects of civil matters. He can be reached at firstname.lastname@example.org or (909) 476-0552.
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