Subrogation Recourse in Swiss Insurance Law
Subrogation recourse is a fundamental mechanism of insurance law that allows an insurer, after compensating its insured, to recover all or part of the amounts paid by turning against the third party responsible for the damage. This right, anchored in art. 72 GSIA for social insurance and art. 95c ICA for private insurance, constitutes an essential tool for balancing the relationship between insurance and civil liability. PBM Avocats assists you in Geneva and Lausanne, whether you are an insurer, an insured or a third party implicated.
Foundations of Subrogation Recourse
Subrogation rests on a simple principle: the insurer who pays takes the place of the insured in their rights against the responsible third party. Two types of subrogation coexist in Swiss law:
- Legal subrogation (art. 72 GSIA): applicable to social insurance (DI, SUVA, income replacement, OASI, FHIA). The insurer is subrogated by operation of law, without any assignment of claim being necessary
- Contractual subrogation (ICA): for private insurance, subrogation must be provided for in the contract or by law (art. 95c ICA)
Conditions of Subrogation Recourse (Art. 72 GSIA)
For the subrogation recourse of social insurers to be valid, several conditions must be met:
- The social insurer must have actually paid benefits to the insured
- A responsible third party must exist (defaulting third party under civil liability law)
- The benefits of the social insurer must have been paid in respect of the same damaging event as that giving rise to the third party's liability
- The recourse may not exceed the amount of benefits actually paid and the third party's share of liability
Subrogation Recourse Between Social Insurers
| Situation | Claiming Insurer | Implicated Insurer |
|---|---|---|
| Occupational accident covered by income replacement before SUVA | Income replacement insurer | SUVA |
| Illness recognised as accident after FHIA compensation | FHIA fund | SUVA |
| DI pays before AAIA recognises the accident | DI | SUVA / AAIA insurer |
| OPA pays a disability pension linked to a third-party accident | Pension fund | Liability of responsible third party |
Subrogation Recourse Against Private Third Parties
The most frequent subrogation recourse pits social insurers against road accident perpetrators, offenders or persons guilty of gross negligence. Social insurers may exercise this recourse directly against the responsible third party or their liability insurer:
- Road accidents: SUVA may turn against the liability insurer of the at-fault vehicle for benefits paid to the victim
- Medical accidents: DI or SUVA may act against the responsible doctor or hospital
- Occupational accidents caused by a third party: the employer may exercise recourse if they have maintained the salary
Obligations of the Insured: Preserving the Insurer's Rights
The insured who receives insurance benefits has a legal obligation to preserve the insurer's rights against the responsible third party. They may not, without the insurer's consent:
- Sign a full discharge with the responsible third party or their insurer
- Waive their rights against the defaulting third party
- Conclude a settlement that would compromise the subrogation recourse
In the event of breach of this obligation, the insurer is entitled to proportionally reduce its benefits in proportion to the prejudice suffered by the recourse. This rule applies to both social insurance and private insurance.
Subrogation Recourse and Full Compensation of the Victim
Federal Supreme Court case law has established the principle that the victim must be fully compensated before insurers may exercise their subrogation recourse (priority of the victim principle). If the responsible third party cannot compensate the full damage, it is the victim who has priority over the social insurers to obtain their share of the compensation.
What is subrogation recourse in Swiss insurance law?
Subrogation recourse is the right that an insurer has, after paying benefits to its insured, to turn against the third party responsible for the damage to recover the amounts paid. The insurer is subrogated to the rights of the insured against the defaulting third party, up to the amount of benefits paid. This right is codified in art. 72 GSIA for social insurance and art. 95c ICA for private insurance.
Can the insured compromise the insurer's subrogation recourse?
Yes. If the insured, through their own fault, prevents the insurer from exercising its subrogation recourse (for example by signing a full discharge with the responsible third party without the insurer's consent), the insurer may proportionally reduce its benefits. The insured has an obligation to preserve the insurer's rights against the responsible third party.
How does subrogation recourse work between social insurers?
Under art. 72 GSIA, if a social insurer pays benefits when another insurer was primarily responsible, the first may turn against the second. For example, if income replacement insurance paid when SUVA was competent (occupational accident), the income replacement insurer may exercise recourse against SUVA to recover the amounts paid.
Can subrogation recourse cover future benefits?
Yes. Subrogation recourse covers not only benefits already paid but also future benefits (pensions, future medical costs). The recourse amount is calculated by capitalising future benefits according to actuarial tables. This capitalisation may result in very significant amounts for young victims with serious sequelae.
Can one negotiate with the insurer exercising subrogation recourse against me?
Yes. The exercise of subrogation recourse is subject to the ordinary rules of civil liability. The responsible third party may contest their liability or the amount of the recourse. Negotiations are possible and often result in settlements. If subrogation recourse is exercised against you, it is strongly advisable to consult a specialist lawyer in civil liability.