GPECC Will File Amicus Curiae Brief

Greater Philadelphia Executive Claims Council (GPECC) Will File an Amicus Curiae Brief Seeking to Allow Direct Right of Subrogation in Pennsylvania.

O’Hagan LLC agrees to represent GPECC in PA Supreme Court.

Philadelphia, PA (July 10, 2014) — The Greater Philadelphia Executive Claims Council (GPECC) is pleased to announce that O’Hagan LLC has graciously agreed to represent the interests of GPECC pro bono in filing an amicus curiae brief on an important issue that greatly impacts our members. The Pennsylvania Supreme Court will address whether Section 319 of the Pennsylvania Workers’ Compensation Act (PWCA) permits a direct action by a Pennsylvania employer/insurer for subrogation against a 3rd party tortfeasor in a Workers’ Compensation matter. In Liberty Mutual v. Domtar, the Court of Common Pleas and the Superior Court both held that the PWCA does not provide employers with the right to bring a direct suit against such a tortfeasor in subrogation.

Claimant was injured while working for Schneider National on a property owned by a third party. Claimant did not bring a direct action, and as a result, Liberty Mutual, Schneider National’s Workers Compensation carrier, brought an action as subrogee. The Court of Common Pleas sustained preliminary objections dismissing the complaint, holding that Pennsylvania does not recognize an independent cause of action by a Workers’ Compensation Claimant’s employer/insurer where the injured party has not sued in his own right and is not a party to the suit.

On appeal, Liberty Mutual asserted that, as the employer, it possessed the absolute right to subrogation under the Workers Compensation Act, and consequently, may sue a tortfeasor directly without the Claimant bringing his own suit. Liberty Mutual cited to the specific language of Section 319 of the PWCA and relied on Scalise v. F.M. Venzie & Co., 152 A. 90 (Pa. 1930) in its appeal.

The Superior Court rejected Liberty Mutual’s argument, and held that the language did not expressly permit an employer to independently sue tortfeasors.  The Court cited to Reliance Insurance Company v. Richmond Machine Company, 455 A.2d 686 (Pa. Super. 1983).

Specifically, in Reliance, the Court held that Section 319 of the Act is an exclusive remedy, and that for an employer or its insurer to enforce its subrogation rights, it must proceed in an action brought on behalf of the injured employee, in order to determine the liability of the 3rd party to that employee. 

On May 29, 2014, the Supreme Court granted Allocatur to review the Petitioner’s Appeal from the Superior Court. O’Hagan LLC, is preparing an Amicus Curiae brief to the Pennsylvania Supreme Court on our behalf.  Forty Seven jurisdictions permit direct recovery where third party negligence or defective products cause injury. Such incidents may lead to significant medical and lost time costs which are borne by the Employer and/or Insurer. Not allowing a direct action in cases where there is clear liability on the part of a third party tortfeasor shifts the costs of the tortfeasor’s liability to the Employer or Insurer without a remedy. The amicus brief is being filed to address the inequities and antiquity of the present case law. We are asking the Court, on behalf of our members, to follow forty seven other states in allowing a direct action and allow our members to collect against liable tortfeasors.