12.29.2011

Ohio Workers' Compensation – Statute of Limitations – Exercise of Subrogation Right

Ohio's most recent statutes creating the right of subrogation for the Bureau of Workers' Compensation (BWC) and self-insured employers have recently been interpreted by the Supreme Court of Ohio in Bur.  Of  Workers' Comp.  v. McKinley, 130 Ohio St.3d 156. In this case, these parties were found to have six years from the date of injury to exercise their subrogation interest in a workers' compensation claim. This statute of limitations was challenged by the claimant as the claimant has only a two-year statute of limitations to file a workers' compensation claim as well any action against any third parties who may have been responsible for the injuries or disease involved in their industrial claim. 

The claimant asserted that Ohio Revised Code (ORC) 4123.93 and 4123.931 do not create a right of subrogation separate from the claimant's right to pursue his or her actions. As the claimant by law had only a two-year statute of limitations, it argued that the BWC or self-insured employer was given only a “typical” or traditional subrogation right of recovery. Under this theory, if one applies a typical derivative subrogation right, the party exercising its subrogation right “stands in the shoes” of the claimant and has no extended time to exercise this right.

The Supreme Court performed an extensive review of ORC 4123.93 and 4123.931. The legislature placed language in these statutes that  creates a right of recovery in favor of the statutory subrogee (BWC or self insured employer) against a third party.” This right of recovery is “automatic” and is an “affirmative grant of a right and not a limitation.” A statutory subrogee's interest arises from the Workers' Compensation Act itself. It is an independent right created by the legislature that permits the pursuit of reimbursement for the workers' compensation benefits that have been paid out by the statutory subrogee. The right of recovery created by these statutes is governed by ORC 2307.05 – which provides a six-year statute of limitations for a liability created by statute.



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btarian@ralaw.com

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