Joe Brown, the defendant, also called the “Released Party”, lives up to his name and fails to cooperate with the plaintiff’s UIM carrier. Why should the defendant cooperate with the UIM carrier if he has been completely “released” for any payment to the plaintiff?
Answer: In Virginia the UIM carrier can not be sued directly (it is only served the complaint as UIM carrier, not as a defendant). The jury believes the case is against the defendant, Joe Brown only. So, to make the UIM procedure work, the system needs a defendant. And, the defendant must cooperate with the UIM carrier in its defense. The released defendant must have some “skin in the game” to encourage his cooperation. The new UIM settlement procedure uses the “carrot and stick” approach to encourage a “released defendant”, like Joe, to cooperate with the UIM carrier. The “carrot” is waiver of the UIM carrier’s subrogation rights against the defendant. The “stick” is bringing it back against the defendant if he fails to reasonably cooperate with the UIM carrier.
New Virginia Code §8.01-66.1:1, effective for policies issued or renewed in 2016, provides the “carrot and stick” reviving a UIM carrier’s subrogation rights.
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