Crs Section 10-1-135 and the Changing Face of Subrogation Claims in Colorado
| Publication year | 2011 |
2011, February, Pg.41. CRS Section 10-1-135 and the Changing Face of Subrogation Claims in Colorado
Fabruary 2011
Vol. 40, No. 2 [Page 41]
Tort and Insurance Law articles provide information concerning current tort law issues and insurance issues addressedby practitioners representing either plaintiffs or defendants in tort cases. They also address issues of insurance coverage, regulation, and bad faith.
About the Author
Christopher P. Koupal is a partner at Chalat Hatten and Koupal PC. His practice concentrates on civil trial work, with an emphasis on automobile accidents, ski and snowboard accidents, professional negligence, and premises liability claims.
Coordinating Editor
William P. Godsman of the Law Office of William Godsman, Denver-(303) 455-6900, wgodsman@qwestoffice.net
This article describes recent changes to Colorado law governing subrogation claims.
Before the recent passage of CRS § 10-1-135, claims for subrogation or reimbursement of medical benefits in personal injury cases were largely controlledby common law. This article discusses the new statute, which codifies many of the common law principles that previously governed the resolution of subrogation claims in Colorado.
Subrogation Claims Before CRS § 10-1-135
Before CRS § 10-1-135 became effective on August 11, 2010, subrogation claims in Colorado were loosely governedby a set of common law principles. From the mid-1970s through the repeal of the Colorado Auto Accident Reparations Act (No-Fault Act) in 2003, Colorado courts recognized the "make whole" doctrine in the context of subrogation claims for personal injury protection benefits broughtby no-fault insurers. Cases analyzing the former No-Fault Act applied make whole principles to prohibit a no-fault insurer from recovering personal injury protection benefits in situations where the insured had not otherwise been fully compensated.(fn1)
Courts that considered make whole arguments following repeal of the No-Fault Act in 2003 largely declined to apply make whole principles to subrogation or reimbursement claims in other contexts, including medical payment claims.(fn2) CRS § 10-1-135 revives many of the common law make whole principles and applies them to traditional subrogation claims. Indeed, the legislative purpose of the old No-Fault Act-"to avoid inadequate compensation to victims of automobile accidents"-is strikingly similar to the legislative intent stated in CRS § 10-1-135-"to ensure that each insured injured party recovers full compensation for bodily injury... ."(fn3)
The common fund doctrine has a long tradition of being applied to subrogation claims in Colorado. At common law, the common fund doctrine was an equitable principle arising from the theory that "those who benefit from litigation ought to share in its cost."(fn4) So, where a plaintiff would undertake legal action at his or her own expense to recover medical expenses to which his or her health insurer claimed a right of reimbursement, the common fund doctrine would mandate that the health insurer pay its share of the expense associated with the recovery.(fn5) In the early 1990s, both the Colorado Supreme Court and the Colorado Court of Appeals applied the common fund doctrine to require workers' compensation and health insurers seeking to enforce subrogation rights to share in the costs incurredby an injured party in obtaining the recovery from a third party.(fn6)
Subrogation Claims After CRS § 10-1-135
CRS § 10-1-135 essentially codifies the common law principles of the make whole doctrine and the common fund doctrine. Although there has been some political debate over the substantive policy reflected in the statute, there is no question that the statute sets out a definitive framework for resolution of subrogation claims in Colorado.
Claims That Are Not Affected
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