Subrogation is a legal doctrine in which a party assumes the rights and responsibilities of another party. It is mostly used in relation to a debt or obligation. The doctrine is part of insurance law, was established during the 18th Century, and was imported into South African law through the case of Ackerman v Loubser 1918 OPD 31.
Within the Botswana jurisdiction, subrogation is governed by common law principle and is recognized as a valid method for transferring rights and obligations.
Subrogation is also utilized in insurance matters as it allows an insurance company the opportunity to step into the shoes of the insured to recover monies for a loss from a third party who is responsible for the loss.
In the ordinary cause, and in most instances, the doctrine of subrogation is used if an insurance company indemnifies/pays a claim for a loss that was caused by a third party. The insurance company thereon has the right to pursue the third party for reimbursement of the claim amount.
It is important to note that subrogation rights in Botswana are subject to the terms and conditions of the specific insurance policy. Some policies may exclude or limit subrogation rights, so it is important for policyholders to carefully review their policy and understand the scope of their subrogation rights.
In the Botswana Court of Appeal Case of OLIVIA BALESENG V KENNETH MOSELE & ANOTHER [CACGB-023-18] [Unreported], the Appellate court found that subrogation however has no effect on the substantive rights and obligations of the parties. The court held that an insured, who has been indemnified by an insurer, whether fully or in part, is entitled to pursue the original cause of action against the wrongdoer for the full loss.
The court held that am indemnification payment by the insurer does not affect the insured’s right or capacity to bring an action or to appear in a court (also termed as locus standi.)
Therefore, parties must be aware that they are is a likelihood of being sued by an insured party even after indemnification from the insurance company via subrogation.
