The Collateral Source Rule prohibits a party from introducing evidence of insurance or a third-party providing coverage in order to offset any type of damages claimed. This rule applies to both plaintiffs and defendants in every personal injury case. A defendant cannot introduce evidence that a plaintiff’s medical bills are reduced or written off by their health insurance. Similarly, a plaintiff cannot introduce evidence that a defendant’s car insurance carrier will cover any judgment entered by a jury.
The Virginia Law
Virginia Supreme Court Rule 2:411 defines Virginia’s Collateral Source Rule, stating:
“Evidence that a person was or was not insured is not admissible on the question whether the person acted negligently or otherwise wrongfully, and not admissible on the issue of damages. But exclusion of evidence insurance is not required when offered for another purpose, such as proof of agency, ownership, or control, or bias or prejudice of a witness.”
This rule is very straightforward. You cannot introduce evidence that a person was or was not insured to affect the issue of damages. The Virginia Supreme Court eloquently summarizes the public policy of this rule, stating that “The collateral source rule is designed to strike a balance between two competing principles of tort law: (1) a plaintiff is entitled to compensation sufficient to make him whole, but no more; and (2) a defendant is liable for all damages that proximately result from his wrong. A plaintiff who receives a double recovery for a single tort enjoys a windfall; a defendant who escapes, in whole or in part, liability for his wrong enjoys a windfall. Because the law must sanction one windfall and deny the other, it favors the victim of the wrong rather than the wrongdoer.” Acuar v. Letourneau, 260 Va. 180 at 193 (2000).
A defendant in a personal injury case is motivated to introduce evidence that a plaintiff did not pay the full amount of the medical bills claimed, but rather their insurance paid some of the medical bills, and a portion of the bills were written-off as part of the health care provider’s contract with the plaintiff’s health insurance carrier. This evidence could reduce the amount of any award of a jury. The collateral source rule prevents this from happening. The reasoning behind it is that the plaintiff pays premiums to their health insurance company to protect him or her from unforeseen injuries, so the defendant causing a plaintiff to suffer injuries should not get the benefit of the plaintiff having health insurance. The rule thereby serves the salutary purpose of making the careless person fully responsible for the harmful consequences of his or her conduct.
What about Lost Wages?
If you miss time from work due to an injury caused by another person, you are entitled to be compensated for the wages you would have been earned if not for your injuries. Even if your employer pays you for the time you missed, the defendant in a personal injury case cannot introduce into evidence the fact that your employer still paid you for time missed pursuant to Virginia Code § 8.01-35, which states that damages for loss of income cannot be diminished because of reimbursement from any other source. This Collateral Source Rule is also reaffirmed in Bullard v. Alfonso, 267 Va. 743 (2004).
The Virginia Supreme Court held in Bullard that a defendant cannot introduce evidence that an employee still receives payment from his employer when that employee cannot work because of a personal injury. These payments are considered gratuitous, and the defendant cannot claim that gratuity to their benefit.
Virginia’s Collateral Source Rule prevents the introduction of insurance, or any type of gratuity, given to offset the costs of medical treatment or lost wages. The reasoning is that the defense should not get a windfall for the plaintiff being provided relief because of their own forethinking or if the plaintiff receives gratuity from others to assist them in their time of need.
Curcio Law considers the collateral source rule critical to every personal injury case. If you are injured due to someone else’s negligence, our lawyers are here to help you rebuild your lives with dignity. Give us a call or text us at 703-836-3366, email firstname.lastname@example.org, or visit www.curciolaw.com for more information.
Justin Curcio joined Curcio Law in January 2020. Justin received his J.D. from St. John’s University School of Law in 2015. After passing the Virginia Bar in 2015, Justin was in-house counsel for an insurance defense firm (Allstate/Esurance/Encompass) for over four years before joining Curcio Law. During law school, he worked for the Nassau County District Attorney’s Office and the law firm of Bartlett, McDonough & Monaghan, LLP. Contact Justin at email@example.com.