Thursday, February 21, 2013
Subrogation is a legal concept whereby a party "steps into the shoes" of another. Most commonly you see subrogation in the context of insurance contracts. For instance, an insurance company that is obligated to its insured might pay the claim to their insured and then "step into their shoes" and sue a third party who is arguably liable. Subrogation provides an opportunity in some situations for an insurer to mitigate what might otherwise be a losing endeavor. Subrogation is most common in construction contracts, insurance contracts, suretyship and negotiable instruments. Seeking to have an insurance company compromise in part their subrogation interest is a common method that plaintiff's attorneys use in the context of personal injury claims to achieve greater recovery for the injured person than they might otherwise be entitled to. There are generally two kinds of subrogation, express and implied.