The Principles That Apply In Subrogation Cases
In Brubacher Excavating, Inc. v. Workers' Comp. Appeal Bd. (Bridges), 575 Pa. 168, 171-72, 835 A.2d 1273, 1275-76 (2003), the Supreme Court reiterated the following principles that apply in subrogation cases:
Subrogation in our workers' compensation system is a significant and firmly established right.
Specifically, while subrogation is an important equitable concept that applies whenever a debt or obligation is paid by one party though another is primarily liable, Smith v. Yellow Cab Co., 288 Pa. 85, 135 A. 858, 860 (1927), in the realm of workers' compensation, it has assumed even greater stature.
Our Court has stated that the statutory right to subrogation is 'absolute and can be abrogated only by choice.' Winfree v. Philadelphia Elec. Co., 520 Pa. 392, 554 A.2d 485, 487 (1989).
This is so because the statute granting subrogation 'clearly and unambiguously' provides that the employer 'shall be subrogated' to the employee's right of recovery. Id.;
See also Thompson v. Workers' Comp. Appeal Bd. (USF & G Co.), 566 Pa. 420, 781 A.2d 1146, 1151, 1153 (2001) (Section 319 subrogation is automatic; ad hoc equitable exceptions do not apply to Section 319).
Thus, the importance and strength of subrogation in our system of workers' compensation cannot be understated.
The rationale underlying the right to subrogation is threefold. Murphy v. Workers' Comp. Appeal Bd. (City of Phila.), 871 A.2d 312 (Pa. Cmwlth. 2005) .
First, it prevents double recovery for the same injury by a claimant. Id.
Second, it prevents the employer from making compensation payments that resulted from a third party's negligence. Id.
Finally, it prevents a third party from escaping liability for its negligence. Id.