Essentially, subrogation is the assumption of legal rights of someone whose debts or expenses have been paid. The simplest example is when an employee is injured in a car accident with a third party. Assuming that the employee was not at fault and the accident arose out of and in the course of employment, it is common for the injured employee to use the workers’ compensation system to pay for his medical bills.
The injured worker may also file a suit against the third party driver who caused the accident. The workers’ compensation carrier will attempt to assert a lien for the past expenses it paid against the future residual proceeds from the third party suit.
The workers’ compensation statute that allows for this subrogation is found at O.C.G.A. §34-9-11. Interestingly, after one year after the employee’s injury, the Employer/Insurer has a non-exclusive right to file suit in its own name or the name of the employee against the third party.
In order for the Employer/Insurer to be successful in this context, it must demonstrate that the injured employee was “fully and completely compensated” for the accident. This is a very hard burden for the employer to prove, if not impossible. The workers’ compensation carrier must prove that the injured worker has been “made whole”.