A recent trend in civil litigation has been the proliferation of disputes over the repayment of subrogation liens and encumbrances and the right of lien holders to pursue the same against the settling parties. While the law of subrogation is most often spoken of as a minefield for plaintiff’s attorneys, defense attorneys should also be aware of the pitfalls and potential exposure to a third party tortfeasor, or that tortfeasor’s carrier.

Generally speaking, under Pennsylvania law, a lien holder or one who seeks payment on unpaid medical bills has a statutory or common law right to seek reimbursement for the medical treatment provided so as to avoid unjust enrichment on the part of the injured party or the third party tortfeasor. Subrogation is an equitable remedy that rests on the principles of unjust enrichment and attempts to accomplish complete and perfect justice among the parties. See In re McGrath’s Estate, 46 A.2d 735 (Pa. Super. 1946) as well as 73 Am.Jur.2d “Subrogation” Section 11 (2005). Certain liens or subrogation rights against third party tortfeasors have been recognized and preserved by statute. Statutorily, liens may be pursued against a third party tortfeasor, at the very least, where the lien holder is the Department of Public Welfare, a worker’s compensation carrier or employer, a federal plan or entity, or certain HMOs.

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