All too often, claims that would otherwise have strong potential for recovery via subrogation cannot be pursued due to issues that arise shortly following a loss. Too many times, hope for recovery is lost because of evidentiary issues or expired limitation periods. As we near year’s end and begin to reflect on the year, here are four tips to help improve the likelihood of a successful subrogation recovery.
Tip 1: Send out notice letters as soon as possible
There may be contractual or statutory requirements to put parties on notice. Failing to adhere to these notice requirements can jeopardize the right to proceed with a claim. Special care must be taken when dealing with certain types of contracts. For example, Canadian Construction Documents Committee (CCDC) Contracts often have very particular notice requirements. When dealing with these types of agreements it is highly advisable to assign counsel to the matter as soon the loss arises, as there may be a short window of opportunity before the potential for recovery is lost.
Tip 2: Determine if the potential defendant is insured
Notice letters to potential defendants should always request that the potential defendant put their insurer on notice. Strategically, it is helpful to learn at an early stage that a potential defendant is insured. By doing this, you know that if liability is clear, recovery is likely. This not only allows the potential defendant’s insurer to better understand the loss, but allows you to avoid spoliation of evidence arguments that can arise at a later date.
Tip 3: Take special care when bringing an action against a municipality
In Canada, shorter limitation periods often apply to municipalities. As municipalities are often the target of subrogated claims, whenever there is any indication that a municipality may be liable, take extra caution.
Tip 4: Keep the evidence.
Evidence retention is a major issue in subrogated claims. All too often, evidence will remain with the insured who may unwittingly fail to properly retain the evidence. As well, it is not uncommon for evidence to be thrown away by emergency restoration service providers. Whenever possible, ensure that the evidence is properly retained by your expert.
