If you’ve been involved in an insurance dispute or personal injury claim, you may have heard of subrogation. Although the principle of subrogation is meant to ensure fairness, it can also impact the amount of a settlement that is ultimately recovered by a Plaintiff.
What is subrogation?
Subrogation refers to the concept of one person or party stepping into the shoes of another person or party. The doctrine of subrogation was historically an equitable remedy which was intended to promote fairness.
A right of subrogation might arise by contract, or by law. For example, you may hold an insurance policy with the following term:
Under the terms of your group policy, any amounts The Insurer pays to you under the group policy, as a result of your injuries, are refundable out of any compensation you may have received from the party responsible for your injuries.
Provisions like these can allow an insurer to step into the shoes of the policyholder, and recover money from the party responsible for the policyholder’s injuries.
Like many other insurers, the Ontario Health Insurance Plan (OHIP) has a right of subrogation with respect to medical expenses arising from certain types of personal injury claims, including medical malpractice claims, and slip and falls.
Why does OHIP have a right of subrogation?
OHIP’s right of subrogation arises from Section 30 of the Health Insurance Act, RSO 1990, c. H.6, which states that OHIP may recover the cost of past and future insured services, if those services were incurred as a result of another’s negligence.*
This provision aims to ensure that medical care costs are borne by the at-fault party, rather than the taxpayer-funded insurance plan.
How do subrogated claims impact medical malpractice cases?
In a medical malpractice action, a Plaintiff will attempt to recover costs associated with past and future care required as a result of their injuries. However, OHIP is subrogated to the Plaintiff’s right to recover the costs of provincially funded medical care and services.
Furthermore, Section 31 of the Health Insurance Act states that any person who brings a personal injury lawsuit (with the exception of motor vehicle accidents) must advance a claim on behalf of OHIP. In other words, Plaintiffs’ counsel must simultaneously advance their client’s claim for damages, while attempting to recover money for past and future costs incurred by OHIP.
This can pose difficulty at the settlement or trial stage. In cases where OHIP has a subrogated claim, any settlement or release will not be binding on OHIP without their approval. This means that if Plaintiff’s counsel forgets to advance a claim on behalf of OHIP, the Ministry of Health may still be entitled to recover healthcare costs out of the settlement proceeds. Unfortunately, this scenario would result in a lesser recovery for the Plaintiff.
Subrogation is a complex but critical aspect of personal injury and medical malpractice litigation. While the doctrine is intended to promote fairness and ensure that the appropriate party bears the financial burden of healthcare costs, it can significantly affect a Plaintiff’s net recovery if not advanced correctly by counsel. In medical malpractice cases in particular, where the stakes are often high and the damages extensive, failing to properly address OHIP’s subrogated interest can result in serious consequences – including a reduced settlement for the injured party. This is why it is essential to work with experienced legal counsel who understand the nuances of subrogated claims, and who know how to advance a client’s full entitlement to compensation.
Bogoroch & Associates LLP has extensive experience handling legal issues such as OHIP subrogated claims. If you or a loved one have been injured in Ontario, contact one of the lawyers at Bogoroch & Associates LLP for a free assessment of your case.
*Note: OHIP does not have a right of subrogation where a person is injured in a motor vehicle accident, while insured under a motor vehicle liability policy issued in Ontario.