Collateral Source Rule: A Plaintiff's Friend at Trial

By: John A. Houghton

Often, personal injury victims are dismayed to find out that the jurors in their case will never hear that the defendant had liability coverage with a large insurer.  However, the Plaintiff has a similar helpful rule working in their favor known as the ‘collateral source rule.’

Georgia law prohibits presentation to the jury of payment of damages by a collateral source. McDonald v. Simmons, 207 Ga. App. 692, 428 S.E.2d 690 (1993).  In other words, the jury cannot consider any evidence that health insurance (or any other outside source) helped pay the medical bills or otherwise compensate the Plaintiff for their economic loss from a wreck.  The collateral source rule generally prohibits a defendant from presenting evidence to the jury that the Plaintiff previously received compensatory payments from other sources. Andrews v. Ford Motor Co., 310 Ga. App. 449 (2011), citing Hoeflick v. Bradley, 282 Ga. App. 123 (2006). Collateral sources include, for example, payments by a Plaintiff’s own insurer, but can include other sources as well, such as “beneficent bosses, or even helpful relatives.” Id. at 124. 

In cases where the Plaintiff received collateral source benefits from a health insurer, the attorney should file a ‘motion in limine’ out of an abundance of caution to prevent any trial participant from commenting on or attempting to offer evidence about these collateral source payments or other such benefits.  This evidence is clearly not admissible and would only prejudice the jury into erroneously reducing its verdict.   

The rationale for this is that “a tortfeasor (defendant) cannot diminish the amount of his liability by pleading payments made to the plaintiff under the terms of a contract between the plaintiff and a third party who [is] not a joint tortfeasor.” Broda v. Dziwura, 286 Ga. 507, 509 (2010).  A tortfeasor cannot derive any benefit from a reduction in damages for expenses paid by others, whether from insurance companies or beneficent bosses or helpful relatives. Olariu v. Marrero, 248 Ga. App. 824, 549 S.E.2d 121 (2001).

The practical effect of this rule allows the jury to consider the full value of the medical charges for treatment and care provided to the Plaintiff.  Similar to the general prohibition on evidence of liability insurance, this rule often causes confusion amongst the jurors.  Based on our experience, the most frequent written question presented by the jurors during deliberations is ‘was there health insurance?’

However, unlike the liability insurance rule, there are frequently jury trials where there is in fact no health insurance or other coverage for the Plaintiff.  As a juror, it is never safe to assume that the Plaintiff had a health plan, and such an assumption is specifically prohibited under the Georgia Rules of Evidence.  Often these cases reach trial because the liability insurer has offered an insufficient amount of money to payback the medical providers (who in turn, can pursue collections against the Plaintiff).  Medical providers and hospitals regularly file liens for the full balance of the medical charge.  These same providers will reserve the right by contract to pursue collection against a patient regardless of whether the patient obtains a favorable personal injury verdict or settlement.

Of course, there are a litany of additional reasons why personal injury cases reach a jury, and blame should not always be placed on one side or another.  Our civil justice system is the greatest in the world and provides safeguards against prejudicial evidence to both sides of the aisle.  Before embarking on a journey through the civil justice system, it is important that a potential personal injury plaintiff have a reasonable understanding of what can and cannot be presented at trial.  Stay safe out there.