Subrogation carriers are typically the first to file a lawsuit against target parties responsible for causing the loss and take the lead in directing litigation. But sometimes the insureds beat their insurer to the punch and become the ones driving the bus. In that case, subrogation carriers should carefully evaluate their options to ensure their rights (and share of recovery proceeds) are protected.

In most instances, the insured is made whole through property insurance payments and so has no need to file a separate lawsuit against target parties. But where the insured has significant out of pocket damages, they may not want to wait for the adjustment to be completed nor coordinate recovery strategy with their carrier and simply hire a lawyer to file suit.

While the insured and insurer may still share the common goal of recovering from the responsible party, their objectives are not always aligned. The insured may be focused on getting a quick recovery of its own losses, be compelled to waive subro rights, or make factual admissions that could hurt later subrogation efforts against that defendant.

To avoid those issues, a subrogation carrier can file a separate action and then seek to consolidate it with the insured’s case.  But that still means the insured’s action is the “lead” case with certain privileges in the litigation (scheduling, priority consideration, etc.)

In contrast, filing a motion to intervene directly in the insured’s case is a potential avenue to take back the reins and be on more even footing with the insured. This can be especially true where a defendant’s liability policy limits are at play. Through intervention, the insurer can more directly participate in litigation strategy, monitor discovery, preserve critical evidence, evaluate liability and damages, and ensure that any proposed settlement properly addresses its reimbursement rights.

By participating directly through experienced subrogation counsel, insurers can better safeguard their financial interests, avoid unnecessary disputes over reimbursement, and help ensure that their subrogation claims are fully considered throughout the litigation.

If you have any questions about subrogation recovery, please contact Paul Landis at 480.502.4664 Ext. 4225 or e-mail at plandis@blwmlawfirm.com,  or Christine Pham at 480.502.4664 Ext. 4206  cpham@blwmlawfirm.com.