Kansas Court Of Appeals Does About-Face Allowing Workers’ Compensation Subrogation Against UM/UIM Policies (Matthiesen, Wickert & Lehrer, S.C.)

Kansas Court Of Appeals Does About-Face Allowing Workers’ Compensation Subrogation Against UM/UIM Policies

Tuesday, May 3rd, 2022 Subrogation Workers' Compensation

On the same day as the Alabama Court of Appeals issued its ruling in O’Brien v. Mobile Public Library, attempting to curtail the rights of a workers’ compensation carrier against UM/UIM benefits, the Kansas Court of Appeals was doing exactly the opposite.

For years, Kansas has not allowed a workers’ compensation carrier to subrogate or recover its lien from benefits paid by an uninsured or underinsured motorists’ (UM/UIM) carrier. However, that position has been questioned and some argue it had been overruled based on recent case decisions.

In a 2001 case of first impression, an UIM’s carrier’s ‘substitute payment’ to an injured worker as a substitute for liability coverage limits was a ‘recovery’ under the statute entitling the workers’ compensation carrier to a lien against the amount of this recovery.

The ruling in Loucks, therefore, was that a workers’ compensation subrogation lien does attach to such a ‘substitute payment’ made by the UM’s carrier in order to preserve the UIM’s carrier’s subrogation rights in response to settlement of the tort claim.

The logic here was that a substitute payment was not a payment of UIM benefits but was a consequence of the remedy pursued by the injured worker against those having legal liability to the worker.


External References & Further Reading
https://www.mwl-law.com/kansas-court-of-appeals-allowing-workers-compensation-subrogation-against-um-uim/
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