When a claimant receives a jury verdict awarding them damages for their injuries, they often end up shocked to learn that the jury’s verdict amount can get reduced by the judge. It doesn’t seem fair. They were blindsided by Connecticut’s Collateral Source Reduction Rule.
It is important for Connecticut injury victims to understand the impact of this rule on their recovery. In this in-depth guide, we will explore the Collateral Source Reduction Rule within the context of personal injury law and recovering compensation for injuries and losses.
There existed at common law a rule barring the defendant from introducing any evidence that the injured plaintiff’s medical bills were paid by an insurance company. This was called the “collateral source rule” because it prohibited evidence of payments from another source (collateral source). The theory behind this rule is that the wrongdoer should not benefit from the fact that the plaintiff was responsible in carrying health insurance. In cases where the claimant’s health insurance paid for their medical bills, that insurer would seek reimbursement through the at-fault party or his insurer. This was called “subrogation.”
In the 1980s, many insurance companies, chambers of commerce, and other corporate actors decided to take aim at plaintiff’s personal injury lawsuits. By using the clever label “Tort Reform,” these business interests persuaded lawmakers across the country to cut back on injury claimants’ rights in the courtroom.
One of those tort reform laws was to abolish or modify the collateral source rule. Tort reform advocates claimed that barring evidence of a collateral source payments could allow an injured claimant to have a “double recovery” – the reimbursement of their medical expenses by their health insurer and a recovery at trial for those same medical expenses. Some states kept the collateral source rule, some abolished it, and some modified it.
Connecticut chose to enact a law that modified the collateral source rule. It essentially allows the judge to take a big bite out of claimants’ recoveries.
Connecticut’s Collateral Source Reduction Rule is codified in Section 52-225b of the General Statutes. This statute states that:
The court shall reduce the amount of such award which represents economic damages by an amount equal to the total of amounts determined to have been paid [by a collateral source] less the total of amounts determined to have been paid, contributed or forfeited under [by paying premiums], except that there shall be no reduction for (A) a collateral source for which a right of subrogation exists, and (B) the amount of collateral sources equal to the reduction in the claimant’s economic damages attributable to the claimant’s percentage of negligence.
Collateral source payments are still prohibited from being introduced at trial. A jury doesn’t see which bills were paid for by insurance. However, the judge holds a special hearing at the end of the trial and automatically reduces the jury’s damages award on medical bills by however much the health insurance company paid. That reduction can get re-balanced by the amounts the claimant paid in health insurance premiums.
In Connecticut, collateral sources typically encompass payments or benefits that an injured party has received from sources other than the defendant. These sources include:
If any of these sources paid for the plaintiff’s medical bills, there will be a court-ordered reduction of the jury award at a separate hearing. However, there are two exceptions:
This means that if the insurer has a valid lien on the plaintiff’s recovery, such as a Medicare lien, Husky lien, VA lien, or an ERISA lien, the court doesn’t reduce the damages award. The reasoning behind this exception is that the insurer can independently recover the amounts they paid by asserting a lien on a recovery or even suing the plaintiff, then it would be a “double punishment” for the court to reduce an economic damages award AND allow the insurance company to pursue reimbursement from the claimant.
If a plaintiff is found to be comparatively at fault for their accident, their damages award is decreased by that percentage. Accordingly, the collateral source reduction must reflect that decrease in the damages award.
Connecticut’s Collateral Source Reduction Rule, as outlined in Connecticut General Statutes § 52-225b, significantly impacts personal injury trials. It is a nuanced statute that requires careful consideration to ensure that plaintiffs receive fair compensation while adhering to the legal framework.
If you or a loved one has suffered a personal injury in Connecticut, it’s vital to consult with experienced personal injury attorneys who are well-versed in collateral source reductions. Their knowledge of the collateral source reduction rule can help drive up the value of settlement. If you have more questions about this statute and how it might impact your claim, please speak with our dedicated team today to learn more about your rights and options.