Super-Recoveries

There is a common misperception that a subrogee may never recover more than the amount of its subrogation interest. While it can be challenging to even make a 100% recovery, sometimes there are opportunities available to make a super-recovery – one in excess of the subrogation interest. 

The simplest way to recover more than the amount of the verdict is to seek taxable costs such as filing fees, witness fees, transcription fees, and expert preparation and testimony expenses. Whether, and which, costs are taxable vary from jurisdiction to jurisdiction, but taxable costs are usually fairly limited and will not include all litigation expenses.

 

A number of jurisdictions allow for statutory pre-judgment interest on the amount of the judgment. Historically, recoverable pre-judgment interest has been as large as 12% per annum (e.g., Florida), but it is much more modest in this economy. Since the discovery process often takes several years before proceeding to trial, a pre-judgment interest award can be a very significant percentage of the gross recovery.

 

In cases in which there are multiple defendants, consider settling with one or more, but less than all, of the defendants. In some jurisdictions (i.e., Minnesota), by doing so, the plaintiff “assumes the fault” of the settling defendants and is limited to recovering at trial from the non-settling defendants no more than their own percentage of the damages as allocated by the jury. However, if the amount of the partial settlement exceeds the settling defendants’ share of the damages allocated to them at trial, the plaintiff may recover more than its subrogation interest even before consideration of pre-judgment interest and taxable costs. While this methodology is not without risks and requires a keen understanding of the strengths and weaknesses of the case, we recently used this strategy to obtain a 120% recovery of a client’s subrogation interest.

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