Subrogation

The worker’s compensation laws provide that if a work-related injury is caused by a third party other than the employer,  and the worker sues that third party and recovers money, the worker’s compensation carrier may be entitled to be paid back “dollar for dollar” for all money that they have paid out on the worker’s compensation claim.  For example, assume a claimant was involved in a machine accident where the machine was responsible for the injury.  Assume also that the worker sued the manufacturer of the machine in a products liability case and recovered $80,000.00.  If $60,000.00 was paid out in medical care, temporary total disability, and permanent disability, the claimant may be able to personally keep only $20,000.00 from their third party lawsuit against the manufacturer of the machine.  Often, agreements are struck around subrogation issues.  Different subrogation rules apply to auto accidents because of Colorado’s No Fault Law.  Sometimes the carrier’s subrogation recovery will be reduced by the attorney fees the claimant’s attorney receives.  (Section 8-41-203, C.R.S.).