In a subrogation context, liability is evaluated based off of a party’s failure to act reasonably to prevent a loss. In automotive subrogation, for instance, the driver who ran the red light failed to act reasonably to prevent them from T-boning the injured driver. They are liable for the loss, as they posed a risk that the injured driver could not reasonably predict or respond to before they were hit by the car.
But what if the hazard were entirely predictable? That would complicate how liability is evaluated in a subrogation dispute. These are known as open and obvious risks – when the injured party really should have seen what happened coming. Was the injured party staring at their phone when they walked through several construction cones and fell into the open manhole cover? It wouldn’t be fair to put all the liability on the utility workers, so weighing negligence between parties becomes nuanced.
Open and obvious hazards often arise in subrogation claims, particularly in cases involving premises (i.e. home, public, commercial property). Understanding how open and obvious hazards affect how liability is evaluated, and how these risks affect recovery, is critical to protecting subrogation rights and maximizing recovery.
Want to listen to an in-depth discussion on open and obvious hazards? Listen to RG attorneys and hosts of the On Subrogation podcast, Rebecca Wright and Steve Alsip, talk theory, statutes, case studies, and more:
What Makes a Risk “Open & Obvious”? Subrogation Meaning & Context
An open and obvious risk refers to a condition that is both visible and apparent. The key issue is whether or not the condition could be easily seen and recognized. When a condition is open and obvious, the argument is that the person encountering it should recognize it as a hazard and take the appropriate steps to avoid it. This affects whether the person responsible for the property or condition is considered legally responsible for the resulting loss.
Subrogation lawyers frequently encounter the open and obvious doctrine in recovery claims involving:
- Slip and falls. Ice, water, and debris are common hazards. These subrogation claims usually involved disputes over visibility and maintenance.
- Trip and falls. Similarly, uneven pavement, damaged flooring, or dangerous obstacles often lead to open and obvious defenses.
- Commercial property subrogation. Tenants, employees, visitors, etc. may encounter visible hazards such as wet floor signs; responsibility is usually determined by maintenance obligations.
- Workers’ compensation claims. Employers and third parties may raise this argument in workplace-related subrogation claims.
- Property damage. Open and obvious arguments are not limited to bodily injury claims; they can include losses caused by factors like equipment placement, construction hazards, obstructions, or environmental conditions that resulted in property damage.
This distinction as to what level of risk avoidance is expected from a reasonable person is really a question of what is “reasonable care” in the face of an open and obvious present danger. This can play a major role in recovery potential of the subrogation claim.
Visibility, Responsibility, & Hazards to Subrogation Outcomes
It is important for subrogating parties to understand that visibility alone cannot support an open and obvious argument; the “obvious” part must be evaluated in the context of the loss incident. These might include facts like where the hazard was located at the time, how the incident occurred, and what conditions existed at the time. Each of these will affect how liability is determined in a subrogation case.
The owner’s or responsible party’s actions are still relevant in open and obvious arguments. Did the property owner fail to maintain the slouching wooden deck where your insured slipped and fell? Did the factory employee knowingly bypass safety settings on the mixer that arched and caused damage to several pieces of equipment around it? Subrogation lawyers should determine if the condition was known, how long it existed, and whether any action was taken in response?
Both facets of an open and obvious argument directly affect recovery potential of a subrogation claim; it might be raised early in the claims process or later during subrogation pursuit. This inevitably affects the liability discussion; open and obvious arguments might be raised to entirely avoid liability or to reallocate partial responsibility. These arguments can influence whether recovery potential exists, how claims are evaluated, how negotiations proceed, and what course subrogation strategy ultimately takes.
Best Practices for Subrogation Lawyers in Open & Obvious Claims
Because these arguments can be raised at any point in the process, early evaluation is critical. The condition, its visibility, and the surrounding circumstances – including actions by relevant parties – are all relevant carriers pursuing reimbursement because they affect subrogation rights.
One thing that’s true across all subrogation contexts: documentation is key. Photographs, witness statements, police/incident reports, surveillance footage, etc. help establish what the condition looked like when the loss occurred. Subrogation investigations should be launched urgently; conditions that existed at the time of the incident may be compromised, cleaned up, or fully disappear, removing potentially critical evidence from the liability argument in a subrogation case.
Since open and obvious arguments are commonly encountered in subrogation claims, insurance professionals and lawyers should understand how/when they apply, how to evaluate them, and how they affect recovery potential. Each case must be reviewed on its specific facts; assumptions should not be made without proper evaluation. These actions ensure decisions are properly informed, protecting subrogation rights and building a strong case for maximum recovery.
Find More On Subrogation
Looking for more open educational resources for subrogation and insurance professionals? Visit Rathbone Group’s blog, On Subrogation podcast, or YouTube channel for more. Have a question or topic we haven’t yet covered? Reach out at podcast@rathbonegroup.com to hear Rebecca and Steve discuss your suggestion on a future episode. And for more information on RG’s subrogation services, inquire at info@rathbonegroup.com.