In this episode of On Subrogation: Contribution Between Tortfeasors, RG partner and subrogation-focused attorney Jason Sullivan explains contribution between tortfeasors – a legal mechanism designed to hold tortfeasors responsible for negligently-caused damages – no matter how many tortfeasors there are.
To illustrate how this principle of shared liability works, Jason poses a hypothetical situation common in automotive subrogation:
There is a rear-end collision involving three cars, but there is only one innocent party: the first car. Your insured is the second car involved, and the other possible tortfeasor is the third car. The innocent party looks to your insured and says, “You’re the one who hit me. You’re the impact I felt. This is your fault”. So you and your insured settle the claim and pay 100% of the innocent party’s damages.
Now, is there a way for you to recover from that payout?
In states that have adopted contribution between tortfeasors (the vast majority have), the answer is yes. In contribution between tortfeasors, if one party pays more than their fair share of damages, they can subrogate against any other tortfeasors who share in the responsibility for said damages.
In the case of this three-car collision, the third car may share in the fault. They ran into you, furthering damages and/or injury caused.
States lay out contribution between tortfeasors in statute, specifying the scenarios in which a subrogating carrier may pursue recovery from another tortfeasor.
Properly Navigating Contribution Between Tortfeasors Maximizes Chance of Recovery
Jason discusses the common caveats to this alternate route to recovery in the case where your insured is one of the tortfeasors:
- Before you can seek contribution from another tortfeasor, you must pay for that other party’s alleged liability in full.
- If your insured caused the damage intentionally, there is no contribution.
- The statute of limitations when pursuing contribution from another tortfeasor may be different and/or shorter than the statute of limitations for typical negligence cases. It will most likely begin from the date you paid out the claim.
As a result, best practices when determining if contribution between tortfeasors applies and if it is worth pursuing require a subrogating carrier to ask three questions:
- Does the state in which the incident occurred have contribution between tortfeasors laid out in statute?
- Are there other parties that share responsibility for the incident?
- What percentage of the incident was their fault and, subsequently, is it fiscally worth it to pursue?
An experienced subrogation attorney will be familiar with contribution between tortfeasors and will know how to best go about holding additional tortfeasors responsible for their share of the damages.
Looking for additional resources on the subrogation process and insurance law? Visit our YouTube channel and podcast library for more episodes of On Subrogation, and check out our blog for articles summarizing certain episodes. If you have a question on subrogation you can’t find, reach out to Rathbone Group at [email protected] for more information.