Yesterday, the Ohio Subrogation Rights Commission held what may be its last meeting to discuss what if any legislative recommendation to make to the Ohio General Assembly regarding subrogation in Ohio. Prior to today's meeting, voting and non-voting commission members submitted their proposals to the chairman.

This Commission was created by the General Assembly to review the Northern Buckeye v. Lawson decision published in September 2004. In Lawson, the Ohio Supreme Court affirmed over forty years of precedent holding it did not violate public policy for a health plan to be reimbursed even when the injured party was not “made whole” as long as the subrogation provision was clear and unambiguous.

By the end of yesterday's hearing, the Subrogation Rights Commission failed to make any formal recommendation to the Ohio General Assembly to change Ohio law regarding subrogation. The Commission has yet to come to any consensus regarding whether any actual problems were created by the Lawson decision from September 2004. A majority of the committee believed there was not sufficient evidence of a problem created by the Ohio Supreme Court's decision presented to this Commission. This is a victory for subrogation rights as most legislators went into the hearing believing the Lawson decision needed to be changed or reversed.

The Commission entertained discussion of the need for possible further study and collection of empirical data on subrogation recoveries in Ohio. Various members of the commission suggested using the market conduct powers of the Ohio Department of Insurance regarding subrogation recoveries for collecting empirical data. Whether any such consensus can be reached remains to be seen. The Commission also discussed public education regarding subrogation. As for the commission, there may be a further meeting in order to have a final vote on whether any consensus of the legislators can be achieved.

Commission members fall into three primary categories: (1) those who want change to a pro-rata formula once the injury attorney is paid his or her full fee; (2) those who want to give the trial courts power to decide the issue and achieve settlement; and (3) those who find that no evidence of any problem was presented and no legislative action is needed.

The feeling by many on the Commission is that nothing needs to be done now as there is no empirical evidence of any real problems created by the Lawson decision. Based upon this consensus, it is unlikely that any legislation will be suggested to the Ohio General Assembly.

According to their website, these affidavits "prove Lawson is being used at the expense of injured victims." As two of the three affidavits involve our law firm, we feel compelled to demonstrate how these affidavits paint an inaccurate, or at the very least, incomplete picture.

The first affidavit is from Attorney Dennis A. DiMartino who represents injured party Roberto Barreto. Attorney DiMartino claims that QualChoice will not reduce its subrogation claim demanding the entire policy limits for a non-ERISA plan and is pursuing the injured party and his attorney. THIS IS NOT TRUE. QualChoice filed its own lawsuit against the responsible tortfeasor under case number 05-CV-2381 to protect its subrogation interest. QualChoice has paid medical expenses for Mr. Barreto in the sum of $81,718.99 to satisfy bills totaling $127,680.47 In fact, QualChoice offered to accept only 1/3 of the available $12,500.00 in coverage for the responsible party allowing 2/3 to the injured party. QualChoice did this despite the fact that it has Lawson language and the legal right to get 100% of the limits of coverage.

The real hardship is caused by Ohio's minimum auto liability limits requiring only $12,500.00 per injured person. This hardship could have been reduced or eliminated if the injured party protected his family by purchasing underinsured motorist coverage to ensure there was sufficient coverage. In contrast, QualChoice cannot purchase any underinsured coverage on Mr. Barreto to ensure its recovery. Blaming QualChoice for the lack of liability coverage on the responsible party and for Mr. Barreto's failure to protect his family by purchasing sufficient underinsured coverage is misplaced.

The second affidavit is from Attorney Julie Schimpf Kehres which laments that Aetna intervened into her injury case demanding $61,034.91 when there is only $100,000.00 in coverage. Attorney Kehres' affidavit argues that "we will not be paid for the prosecuting the claims". In fact, Aetna hired its own counsel to intervene in the case so that the jury could decide what if any of the medical bills claimed by the injured party which were paid by Aetna are actually related to the accident. The adverse carrier to the best of our knowledge has only offered $5,000.00 to settle the injury claim as they dispute whether all the medical treatments are related to the accident.

As is evident from the affidavit, the attorney's concern is not the injured party but in getting an amount for prosecuting the case and their expenses. Aetna's participation should benefit the Attorney and her client as the jury will decide what bills if any are caused by the accident and due/owing to Aetna in subrogation. Attorney Kehres does not offer any information as to application of Lawson when there is no settlement or accepted offer. In fact, this case is set for trial in December 2005.

The third and final affidavit is from Attorney Dan Michel regarding having to repay a $5,000.00 medical payments subrogation claim to State Farm from some undisclosed settlement. In his affidavit, Attorney Michel suggests State Farm should reduce because he "was not able to attain the amount of settlement my client anticipated". Unlike health claims, State Farm's coverage is only for accident related medical expenses. In fact, Attorney Michel's alleged Lawson abuse is that they did not " take into account the fact that my client incurred attorney fees in order to recoup the money". Again, Attorney Michel's complaint is simply the insurance company would not pay him a fee on the subrogation claim. Attorney Michel should know better than anyone that attorney fee issue was not appealed in the Lawson case as he represented the Lawson family.

Why is The Academy acting like Chicken Little claiming the sky is falling without any evidence to support their claim? None of the affidavits show that the injured party went uncompensated with the subrogated entity taking the entire recovery. In fact, one affidavit applies to a pending case which is yet to be resolved.

The Ohio Academy of Trial Lawyers claims to be looking out for injured Ohioans. If this is their goal, then they should look to raising minimum liability limits for Ohio motorists. A second change could be to limit their own fees which they take from injured Ohioans. If you are concerned with protecting Ohio's citizens, then you must look no further than the 40% and even 50% fee plus expenses charged by some Trial Lawyers for representing injured parties. If a person is not "made whole" or cannot recover an "anticipate" amount, then The Academy should propose legislation which would eliminate their fees or limit the percentage paid to ensure injured Ohioans recover for their damages. If Trial Lawyers fees are limited, then you put more recovery dollars in the pocket of the injured citizens.

The Columbus Dispatch devoted its front page on Halloween to discussion of the "Subrogation Rights Commission" hearings in an article entitled "Dibs on Damages". In its article, the paper claims that the Lawson decision from the Ohio Supreme Court "put Nationwide first in line for the money." The Dispatch featured the Brown family and their Attorney Keith Karr describing the inequity of subrogation under Lawson. It appears that neither the Columbus Dispatch, the Browns, or their attorney want to let a simple thing like the facts get in their way of playing on the sympathies of Ohio citizens.

In his article, Mr. Nash for the Columbus Dispatch wrote that "the $270,000.00 settlement didn't end up in the family's pockets." Mr. Nash wrote that the entire $270,000.00 in recovery "went to their insurance carrier, Nationwide, to cover what the other driver's policy didn't." This fact is false in two respects!

Documents filed in the estate of the late Kourtney Brown indicate that Nationwide received nothing by way of settlement. In fact, Attorney Karr quoted in the article filed a letter with Judge Kenneth Spicer indicating that Nationwide actually waived their right to subrogation for medical payments.

Moreover, the probate court for the late Kourtney Brown has yet to finalize a settlement as the hearing is not set until November 30th, 2005. Attorney Karr's associate asked the court to continue any hearing to approve settlement as the "healthcare insurance subrogation carrier has not made its decision". In addition, the probate court advises they have nothing filed to approve any settlement for Joshua Brown either. A simple effort to check the facts of the settlements unearthed the falsity of the statements made in the Columbus Dispatch.

The Dispatch article also claims that Mrs. Brown and her husband Tim "sued the driver of the Cherokee". The probate documents, however, don't indicate any such suit was filed. The attorney's letter indicates that the "insurance carrier for the at-fault driver" tendered its $100,000 limits. This letter advised the probate judge that Kourtney's estate and her family members sued Nationwide Insurance Company in Franklin County Common Pleas Court case number 05-CVC-04-3901 to obtain additional compensation through a possible umbrella policy. Again, the Columbus Dispatch got the facts wrong. Nationwide is being sued to get more money for Kourtney's estate and her family members.

The Columbus Dispatch article claims Nationwide is getting all the recovery money when in fact Nationwide is being sued to pay money after it waived its subrogation rights. As Ohio citizens and subrogation professionals, we call on the Dispatch to retract its story as false. Ohio's citizens deserve the facts.

The hearings are underway in Columbus. The Ohio Academy of Trial Lawyers purpose with attacking subrogation is clear: protection of attorney fees at the cost of injured victims and Ohio's citizens. The agenda of the Ohio Academy of Trial Lawyers (OATL) is clear from their questions, testimony and proposed legislation.

In the first hearing, the OATL members on the commission inquired about "procurement costs" being protected first in any recovery. OATL's membership's first priority is the protection of their fees on the gross recovery dollars. In their questions to National Association of Subrogation Professional (NASP) representative Elliott Feldman, Senator Dan and Representative Book both stated that "procurement costs" should come off the top of any recovery and needed protection.

In the second hearing, OATL representative Doug Roberts from Columbus testified that in cases where the injured party is fully compensated he still seeks a reduction in the subrogation for his attorney fee for collecting the settlement funds. As a golden rule, Attorney Roberts testified that he tries to get the subrogation at 50% in all cases if possible. In fact, one of Attorney Roberts' three main points deals with payment of attorney fees and expenses.

At this second hearing, the effort to protect OATL member's fees came in the form of the proposed legislation re-introduced by OATL president Philip Fulton at the hearing on September 28th, 2005. The OATL sponsored legislation again provides for the attorney's fee and expenses to be taken first from any recovery regardless of the severity of the injury or loss. In other words, "made whole" does not apply to their representation contract with the injured party. In fact, OATL's proposed legislation requires the injured party and subrogated insurers to only partially recover while injury attorneys never take a reduction in their fees and expenses.

The trial attorneys again claim to represent the injured victim and to look out for the little guy. Instead, they have proposed legislation which would only ensure their fees are always paid regardless of the recovery dollars. OATL's proposal ensures that the little guy and the subrogated carrier who paid all the accident related medical bills split what is left once the trial attorney gets a full fee and all expenses. How does such legislation help Ohioans as a whole unless we all become injury attorneys?

The first meeting of the Ohio Subrogation Rights Commission occurred on August 31, 2005 at the Ohio Statehouse. The Commission elected Representative Geoffrey Smith as its chairman. The Commission will conduct hearings every other Wednesday from September through the end of the year. The Commission will start hearing testimony from interested parties at its next meeting on September 14, 2005.

The Commission has yet to decide if it will have the proponents of change/trial lawyers testify first followed by testimony from the subrogation industry or will they present it as point and counter point testimony. If you want to get email notification of the Commission hearings or wish to offer testimony to the Commission, you must call (614) 644-6500 to speak to James or Zach who are the assistants to Representative Smith.

As the fall approaches, subrogation entities in Ohio brace for the hearings of the Ohio Subrogation Rights Commission. The Commission was the product of lobby efforts by personal injury attorneys in Ohio. The Commission was created to investigate perceived problems with the way subrogation is handled in Ohio.

To understand what type of legislation personal injury attorneys desire, we need only look to what New York is considering regarding subrogation. During this past year, New York's legislature has been considering a new statutory amendment to eliminate all state law subrogation rights. The new statute seeks to amend CPLR 4545, adding a new section (e) which eliminates all subrogation rights (including auto property damage claims).

New York's collateral payments law CPLR 4545 was initially enacted in the 1980s to respond to the "medical malpractice insurance crisis". The twin goals of the initial law were to reduce medical malpractice premiums and prevent double recovery. This statute was eventually extended to apply the collateral set off to all other tort actions. Currently, CPLR 4545 does not bar the subrogated carrier from filing suit or intervening to seek recovery of their claims against the responsible party.

Now, Senator DeFrancisco, who is a personal injury attorney in New York, introduced legislation to eliminate all subrogation rights under state law. Senate Bill S5555-A seeks to eliminate any right of subrogated entities to seek repayment from the responsible party and from the injured party in reimbursement whether there is settlement or trial. The statute goes even further to classify all settlement money as pain and suffering only and not compensation for past or future medical expenses. The statute calls for the abolition of subrogation for health plans, medical payments and also property damage claims such as auto damages.

In his Sponsor Memorandum, Senator DeFrancisco alleges that subrogation acts as a "toll" for settling cases and delays trials as subrogated parties "intervene" to protect their claims. These arguments are specious at best. This alleged "toll" is that the injury attorney must actually negotiate with the subrogated interest instead of not paying them or sending them a check for some nominal amount they deemed fair. Injury attorneys consider it a "toll" to assist their clients in honoring their contractual obligations to the insurer and health plans. In addition, intervention of the subrogated entity generally is obtained well in advance of trial to prevent delay. The presence of the subrogated entity gives the jury the accurate picture of health coverage which they may have to assume without such involvement. Again, the injury attorneys oppose intervention because it forces them to negotiate with the subrogated entity. To see the full memorandum and legislation, go to:

Senator DeFrancisco's memorandum characterizes this amendment as serving the purpose of reducing liability insurance premiums. In reality, the premiums for auto coverage as well as health insurance will have to increase to make up for the lost recovery dollars from subrogation. The amendment shifts the risk of paying for a loss from the party responsible for the injury to all New Yorkers who will now pay more for all types of insurance. In the end, the only winner is the personal injury attorney who will receive a higher fee in each case.

In Ohio, personal injury attorneys are looking to alter over forty years of legal precedent in the area of subrogation. Ohio insurers and others need only look east to New York to understand that their motivation is the elimination of all subrogation. The Ohio Subrogation Commission is merely another avenue to reach their goal. As the fall hearings in Ohio occur, it is important to understand the opposition's goals and motives in undermining Ohio's long standing law.

Ohio's prior experience with the elimination of subrogation did not produce the desired effect in the area of medical malpractice. In 2003, Ohio repealed its medical malpractice bar to subrogation from the 1970's which was similar to CPLR 4545. Ohio's experience without subrogation in medical malpractice cases did not cause stability in premiums as desired. As of April 2003, Ohio's statutes allow for full subrogation in medical malpractice and other tort claims. This legislative change suggests that non-economic damages and not subrogation are the problem for medical malpractice premiums.

As the commission meets, Ohioans need to ask who would really benefit from changes in subrogation. The simple answer is trial attorneys and their injured clients!! They would rather all citizens pay more for insurance coverage just to protect their fees and recovery dollars. Who is harmed if subrogation is eliminated? All Ohioans especially ones who are not involved in accident claims!! Non-injured residents will have to pay more in premiums for their health, auto and property coverage so a personal injury attorney and his client can get more recovery dollars.

Ohio subrogation entities need to voice their support of subrogation to ensure that the Commission does not change Ohio law in order to benefit injury parties and attorneys at the expense of all other Ohioans. Ohio's Subrogation Rights Commission needs to recommend to the legislature that it leave subrogation alone. This answer is the only one which benefits all Ohioans.

The House amended version of section 2323.44 Subrogation Rights Commission was concurred with by the Senate on June 16, 2005. The bill currently awaits signature by Governor Bob Taft. The House changes are significant to the insurance industry. First, the House amended the bill to include an injured party who was harmed by subrogation to put a face on subrogation recoveries. In addition, the House version of the bill speeds up the time frame for the Commission to report to the Legislature by December 31, 2005. The Senate version of the bill gave the Commission one year from the date of its enactment of the amendment in which to issue its report.

The Bill has yet to be presented to the Ohio Governor. Sometimes this can take several weeks to get to the Governor. Once this occurs, the Governor has 10 days (excluding Sundays) in which to sign the bill or veto it. If the Governor signs the bill or takes no action, the bill becomes effective after the 10 days lapse. This legislation has an emergency clause making it effective upon signature or the expiration of the 10 days. See http://www.legislature.state.oh.us/process.cfm for how a bill becomes law in Ohio.

As it stands, the Subrogation Rights Commission will be given less than 5 months in which to make recommendations to the General Assembly regarding subrogation. The severe time limitation only ensures the Commission and its members will not have sufficient time to understand subrogation and gather all data regarding its impact. The Commission needs to hear from all insurance representatives, plans and others regarding the importance of subrogation recoveries to keeping costs contained from all Ohioans.

Good Morning, my name is Daran Kiefer. I appreciate Chairman Representative Bill Seitz and the Committee members of the Civil and Commercial Law Committee affording me the opportunity to testify and speak before you today regarding S.B. 124. My purpose is to speak to this Committee regarding the changes being made to R.C. § 2323.44 entitled Subrogation Rights Commission.

By way of background, I am a licensed attorney practicing with the law firm of Kreiner & Peters Co. L.P.A with offices in Cleveland, Columbus and Cincinnati. Our firm has nearly thirty years of experience in representing all types of insurers, third-party administrators and employer plans in subrogation matters throughout Ohio and Kentucky.

I have been a practicing attorney in Ohio since 1994 and have limited my 11 years of practice to the representation of subrogated entities. My practice has involved representing various health insurers and organizations before the Ohio Supreme Court and the U.S. Court of Appeals for the Sixth Circuit. Specifically, my law firm represented several entities in an Amicus Brief before the Ohio Supreme Court in N. Buckeye Educ. Council Group Health Benefits Plans v. Lawson (2004), 103 Ohio St. 3d 188. Also, I have spoken at numerous seminars regarding subrogation in Ohio for attorneys.

The purpose of my testimony today is to ask this Committee to consider adding an additional member to the proposed Subrogation Commission. I would ask this committee to consider adding a Subrogation Attorney to the list of nonvoting members. As written, the Commission contains a representative from the Ohio Academy of Trial Lawyers and the Ohio Bar Association. Neither of these two attorney members can offer the Commission insight into the actual practice of a subrogation law nor present its benefits. My testimony will begin with a discussion regarding the importance of subrogation to Ohio and then will discuss the benefits of adding a subrogation attorney as a nonvoting members of the Commission.

In order to understand subrogation, one must first understand the difference between "Legal Subrogation" and "Conventional Subrogation". "Legal" or "Equitable" subrogation" arises as a matter of law/equity in absence of some contractual or statutory rights. "In general, Legal subrogation arises by operation of law and applies when one person is subrogated to certain rights of another so that the person is substituted in the place of the other and succeeds to the rights of the other person. State v. Jones (1980), 61 Ohio St.2d 99, 100-101, 15 O.O.3d 132, 133, 399 N.E.2d 1215, 1216-1217." See Blue Cross & Blue Shield Mut. v. Hrenko, 72 Ohio St. 3d 120, 121 (Ohio, 1995) essentially, subrogation involves one person stepping into the shoes of another after making a payment on their behalf.

In contrast, "Conventional Subrogation" arises as a matter of contractual obligation and agreement. "Conventional" or "Contractual" subrogation right allows the parties to establish the reach, parameters and limits of subrogation in a contract. “Conventional subrogation is premised on the contractual obligations of the parties, either express or implied. The focus of conventional subrogation is the agreement of the parties. Id. at 101, 15 O.O.3d at 133, 399 N.E.2d at 1217.” See Blue Cross & Blue Shield Mut. v. Hrenko, 72 Ohio St. 3d 120, 121 (Ohio, 1995) "Conventional" subrogation arises by contractual agreement between the parties.

Generally, legal treatises agree that "conventional" or "contractual" subrogation should not be subjected to "equitable" doctrines such as "made whole" as the right is defined by the terms of the contract. See 16 Couch on Insurance 3d § 233:134 pgs. 223-147,148; 22 Holmes' Appleman on Insurance 2d §141.2[B][1] pg 426 (copyrighted 2003); 3 Appleman Insurance Law and Practice §1675 pg. 497 (copyrighted 1967). Equitable Doctrines such as "make whole" or "common fund" are not properly consulted when dealing with "conventional" or "contractual" subrogation.

The Lawson decision did not create or expand subrogation rights in Ohio. Indeed, Ohio has a long tradition of enforcing "conventional" subrogation rights which are found in various policies of insurance. See Peterson v. Ohio Farmers Insurance Co. (1963), 175 Ohio St. 34, 38; 191 N.E. 2d 157; Ervin v. Garner (1971), 25 Ohio St. 2d 231; 267 N.E.2d 769; and Blue Cross Blue Shield Mutual of Ohio v. Hrenko, 72 Ohio St. 3d 120, 647 N.E.2d 1358. In fact, the Lawson Court only affirmed the over forty years of precedent by looking at the terms of the "contract" when enforcing subrogation rights under Ohio Law.

The Ohio Supreme Court has limited "conventional" subrogation only when it is perceived to interfere with statutorily mandated coverage. Consider, James v. Michigan Mutual Insurance Co. (1985), 18 Ohio St. 3d 386, 481 N.E. 2d 272; Berrios v. State Farm Insurance Co. (2002), 98 Ohio St. 3d 109, 781 N.E. 2d 149. Each of these case limit subrogation by the auto carrier only in the context of "uninsured" or "underinsured" motorist coverage when it would reduce the recovery of the injured party.

The case law demonstrates that Ohio courts have long recognized the rights of the subrogated insurer or entity to recover for their payments. In fact, Ohio courts have operated on this basic premise of enforcing contract subrogation without destroying personal injury recoveries. The Lawson decision continued enforcement of "conventional subrogation" to the benefit of Ohioans as a whole.

The enforcement of "conventional" subrogation is good for Ohio and its injured citizens. A policy which allows for "contractual" subrogation encourages and fosters the prompt payment and settlement of claims for injured Ohioans. A health plan or property casualty insurer who is unable to seek repayment through subrogation likely would choose to delay payment or exclude property or medical claims from coverage if another party may be responsible. Such a policy could lead to injured Ohioans not having coverage unless and until they can prove responsibility in tort upon another person or entity. Also, this policy may lead to claims which are never paid if the injured Ohioan fails to prove liability and the time limit to present a claim to their own insurer has passed.

In contrast, "conventional" subrogation encourages the prompt processing of claims for the injured Ohioans. Insurers and administrators can advance or cover accident related claims and expenses caused by another because they have the potential to recover some or all of this payment. Moreover, health insurance subrogation can actually lead to lower payments by Ohio tort insurers due to negotiated discounts paid by the subrogated health plan instead of the actual billed charges.

"Conventional" subrogation helps to keep premiums stable across the lines of insurance. In the health insurance arena, "conventional" subrogation factors in the rates and premiums charged to insure plans. Without such recovery dollars, premiums would increase due to a large loss ratio for the group. "Conventional" subrogation is even more critical when dealing with self-funded or self-insured plans. Any loss or reduction in subrogation dollars means more money must be contributed by the employer and employees to fund this plan¹

¹Insurance companies can take subrogation into account in setting their rates, at least in setting health insurance rates….An insurance company sets its rates based on historical net costs. Thus, if the insurer had one hundred policyholders in the experience period, and experienced a total of $ 20,000 in claim costs, it will set its actuarial premiums at $ 200 per policy holder. If, on the other hand, the insurance company experienced $ 20,000 in claim costs and received $ 5,000 in subrogation, it will set its actuarial premiums at $ 150 per policy holder. Thus, whether the insurer lists subrogation as a factor in its actuarial calculations is irrelevant; it is implicitly included.” See Jeffrey A. Greenblatt, Insurance and Subrogation: Where the Pie Isn't Big Enough, Who Eats Last? 64 U. Chi. L. Rev. 1337, 1355 (1997) citing Harry L. Sutton, Jr. and Allen J. Sorbo, Actuarial Issues in the Fee-For-Service/Prepaid Medical Group 46 (Center for Research in Ambulatory Healthcare Admin 2d ed 1993) ("An adjustment to estimated total HMO expenses ... should be included to project the impact of coordination of benefits, workers' compensation, and subrogation.") and author's Phone Interview and Letter from Dean K. Lamb, Senior Actuary for Allstate Insurance Company, to Jeffrey A. Greenblatt, Jan 30, 1997 ("Lamb letter") (on file with U Chi L Rev).

Because the primary goal of a health plan is to spread risk amongst its various members, plans use historical evidence or actual experience data in setting the rates for a given group. Therefore, when one member of the group incurs a large loss which goes unreimbursed, the effect of the loss will be passed on to the other members of the group via higher rates and premiums. If “conventional” subrogation is reduced, then Ohio employers and working men and women would have to pay more for their health and other insurance.

In looking at the subrogation issue this Committee should keep in mind the public of Ohio as a whole. “Public” in this instance would be all residents who are covered members of a health plan, whether it is self funded or funded through the payment of insurance premiums and other insurance products In contrast, fewer residents of the “public” are personal injury plaintiffs. If you are concerned about the all Ohioans, then the Committee should be concerned with the continued enforcement of “conventional” subrogation. If “conventional” subrogation is eliminated or reduced, then every citizen who works with an injured party will have to pay more out of their paycheck for medical care for their family or themselves while the injured party enjoys a windfall by recovering from the medical plan and the responsible party.

Finally, subrogation makes sure the party responsible for causing a loss or claim actually bears the burden of paying for the damages which they cause. Subrogation provides that a wrongdoer and not the innocent health plan members or other parties actually bear the cost for the damages which they cause. Subrogation involves more than just medical payments as it encompasses a way at law to ensure that a negligent party cannot avoid paying for their actions or escape liability for damages.

In summation, “conventional” or “contract” subrogation is good for Ohio and good for all Ohioans. “Conventional” subrogation encourages the prompt payment of accident related claims to insured Ohioans, keeps premiums stable for Ohio's residents, prevents innocent employees and Ohioans having to pay more for accident injuries to their co-workers and ensures the responsible party must pay for all damages which they cause. Ohio's long standing tradition of enforcing “conventional” subrogation leads directly to benefits for all citizens and employers.

My purpose for appearing and offering this written testimony is to argue that R.C. § 2323.44 should be amended to also include a “subrogation attorney” in the nonvoting members of the proposed Subrogation Commission. The current panel of the Commission includes an attorney who primarily practices personal injury law through the Ohio Academy of Trial Lawyers, a member of the Ohio Bar and an sitting judge. Absent from the panel is any attorney or practitioner who handles health, property casualty, fire and other subrogation matters on a daily basis. It is my position that this Committee should remedy this situation by adding a tenth nonvoting member who is a “subrogation attorney in Ohio.”

A subrogation attorney is the only attorney who can offer insight to the commission of how such claims are presented in litigation, when they are pursued without an injured party, and what process goes into presenting a case to a jury. The subrogation attorney would likely offer an alternative interpretation to case decisions from the one presented by the Ohio Academy of Trial Lawyers. A subrogation attorney offers balance to the legal view which would be presented by the personal injury attorney representative on the commission.

Moreover, a subrogation attorney can offer insight into any proposed legislation regarding its actual implementation in a courtroom from the subrogation position. Subrogation attorney involvement could help explain, demonstrate and evidence the need for advice to the insurer and health plans separate from any advice which the personal injury attorney may attempt to provide. In fact, the subrogation attorney would be able to illustrate the conflict of interest situations which the personal injury attorney may be involved with any proposed legislation.

Finally, a subrogation attorney on the panel would be able to bring to the commission information on subrogation efforts in other states and jurisdictions. The subrogation attorney would be able to balance claims of the personal injury attorneys regarding actual practices. Importantly, the subrogation attorney can offer insight into the current interplay of federal law under ERISA, FEHBA and other programs with Ohio law.

In conclusion, I appreciate your attention to my testimony and affording me the opportunity to speak to this Committee today. I would be happy to entertain any and all questions you have regarding the practice of subrogation in Ohio. It is my desire that this Committee amend S.B.124 to add a tenth nonvoting member who is a subrogation attorney.