(Please note: the names and locations of all parties have been changed to protect the confidentiality of the participants in this automobile accident/personal injury case and its proceedings.)
THE COLLATERAL SOURCE RULE IS UNQUESTIONABLY THE CONTROLLING LAW IN CALIFORNIA
The collateral source doctrine has been the rule in California since at least 1925. Clark v. Burns Hamman Baths (1925) 71 Cal.App. 571, 575. The doctrine “expresses a policy judgment in favor of encouraging citizens to purchase and maintain insurance for personal injuries and for other eventualities.” Lund v. San Joaquin Valley Railroad (2003) 31 Cal.4th 1, 10. The California Supreme Court explained the rationale behind the rule: if the tortfeasor were allowed to mitigate damages with payments from plaintiff’s insurance, plaintiff would be in a position inferior to that of having bought no insurance, because his payment of premiums would have earned no benefit. The defendant should not be able to avoid payment of full compensation for the injury inflicted merely because the victim has had the foresight to provide himself with insurance. Id. at 10.
The Court elaborated on the related rule prohibiting the introduction of collateral source evidence, citing to Hrnjak, supra, 4 Cal.3d 725. In Hrnjak, the trial court allowed the defendant in a personal injury action to introduce evidence that the plaintiff had received insurance benefits, asserting the evidence was relevant to the plaintiff’s motives in seeking medical help and his credibility as a witness. Id. at p. 728. The Supreme Court held that this ruling was an abuse of discretion under Evidence Code § 352 because [e]ven with cautionary instructions, there is substantial danger that the jurors will take the evidence into account in assessing the damages to be awarded to an injured plaintiff.
Thus, introduction of the evidence on a limited admissibility theory creates the danger of circumventing the salutary policies underlying the collateral source rule. Admission despite such ominous potential should be permitted only upon a persuasive showing that the evidence sought to be introduced is of substantial probative value. Hrnjak, supra, 4 Cal.3d at 732-733. The Court concluded that jurors should not be told that the plaintiff can recover compensation from a collateral source. Lund, supra, 31 Cal.4th at 10. (See Part 5 of 8.)
For more information you are welcome to contact Sacramento personal injury lawyer, Moseley Collins.