Supreme Court Rules That Workers’ Compensation Insurers May Not Pursue Subrogation Claims Directly Against Third Party Tortfeasors

Published on: April 27, 2015

The Pennsylvania Supreme Court ruled today – in a 3 to 2 decision – that Section 319 of the Workers’ Compensation Act, 77 P.S. 671, does not permit employers/insurers to commence an action directly against third party torfeasors. The decision, in Liberty Mutual Insurance Co. v. Domtar Paper Co., affirmed the trial court’s grant of preliminary objections in favor of the defendants/tortfeasors. The Superior Court had previously affirmed the trial court.

In the Majority Opinion by Justice Baer, the Court noted that prior decisions “have consistently held that an employer/insurer has no independent right to sue a tortfeasor in the absence of the injured employee.” The majority, which also included Justices Eakin and Stevens, therefore concluded: “[We] reaffirm that the right of action against a third-party tortfeasor under Section 319 of the WCA remains in the injured employee, and that the employer/insurer’s right of subrogation under Section 319 must be achieved through a single action brought in the name of the injured employee or joined by the injured employee. Because Lawrence did not commence an action against Appellees, was not named in the action filed by Liberty Mutual, and did not join the action filed by Liberty Mutual, the Superior Court properly affirmed the grant of Appellees’ preliminary objections.”
Chief Justice Saylor filed a Dissenting Opinion, asserting that because “the caption as stated effectively makes the injured employee the use plaintiff,” he dissents. In a separate Dissenting Opinion, Justice  Todd “agree[d] with the majority, to the extent it preserves the right of an employer or its insurance company, as subrogee of an injured employee, to bring suit in the name of the injured employee in the capacity of a ‘use-plaintiff.'”

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