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Tennessee Collateral Source Rule – Status of the pending proposed 2013 Tennessee legislation to abolish the collateral source rule in Tennessee.

Posted on Apr 3 2013 11:49PM by Attorney, Jason A. Lee

The Tennessee legislature is considering many interesting pieces of legislation in the 2013 legislative session.  One bill that is of great interest to Tennessee attorneys as well as anyone handling Tennessee personal injury claims is SB 1184/HB 0978.  The bill is aptly named the “Phantom Damages Elimination Act”.  This bill would effectively abolish the collateral source rule in Tennessee. 

The collateral source rule prevents a defendant from introducing evidence that the injured plaintiff received payments from any other source to try to reduce or mitigate the damages sustained by the plaintiff.  The Tennessee Court of Appeals in Fye v. Kennedy, 991 S.W. 2d 754, 763 (Tenn. Ct. App. 1998) stated that:

 

An injured party's right to recover his or her “reasonable and necessary expenses” must be viewed in connection with the collateral source rule:

 

Normally, of course, in an action for damages in tort, the fact that the plaintiff has received payments from a collateral source, other than the defendant, is not admissible in evidence and does not reduce or mitigate the defendant's liability.

 

See also John Day’s detailed discussion of the collateral source rule on his blog for a more detailed discussion of the collateral source rule. 

 

Proposed SB 1184/HB 0978 would effectively eliminate the collateral source rule in Tennessee.  In fact, the language in the bill would only allow a plaintiff in a personal injury or wrongful death case to recover economic damages for medical and other costs of medical care for:

 

            (1) The amount actually paid by or on behalf of the claimant;

            (2) Any amount necessary to cover unpaid medical expenses;

            (3) Any amount necessary to satisfy future medical charges.

 

Remember, in Tennessee Health Care Liability actions (Medical Malpractice cases), the collateral source rule was eliminated by statute with T.C.A. § 29-26-119 a long time ago.  As a result, there is a precedent for this kind of action.

 

The actual text of the pending proposed bill, as filed, is as follows:

 

SECTION 1. Tennessee Code Annotated, Title 29, Chapter 39, Part 1, is amended by adding a new section as follows:

29-39-105.

(a) In any civil action for personal injury or wrongful death to recover economic damages in which liability is admitted or established, the economic damages that may be recovered by a claimant for medical and other costs of health care shall only include:

(1) Any amount paid by or on behalf of the claimant;

(2) Any amount necessary to satisfy unpaid charges for medical and other costs of health care that have been incurred but not yet satisfied by or on behalf of the claimant; and

(3) Any amount necessary to satisfy future medical charges proven by expert testimony.

(b) This section shall not be construed to increase the amount of or type of damages recoverable under state law.

(c) This section shall not be construed to alter subrogation rights under state law.

(d) This section is in addition to, and does not otherwise affect, any other limitation on damages under state law. 

This bill was debated and discussed multiple times in the 2013 Tennessee legislative session.  However ultimately, the Senate Judiciary Committee decided to establish a study committee to further discuss and study the impact of this bill over the summer and fall of 2013.  The bill will be brought back in 2014 pursuant to the request of Senator Jim Tracy, who sponsored the bill in the Senate, with the approval of the Judiciary Committee.  It will be interesting to see what the study committee recommends for this bill.  I expect this to be a hotly debated and contested bill in the 2014 legislative session.

Follow me on Twitter at @jasonalee for updates from the Tennessee Defense Litigation site.


TAGS: Damages, Evidence, 2013 Tennessee Legislation, Tennessee Medical Malpractice/Health Care Liability, Insurance
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Jason A. Lee is a Member of Burrow Lee, PLLC. He practices in all areas of defense litigation inside and outside of Tennessee.

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Tennessee Defense Litigation Blog
Jason A. Lee, Member of Burrow Lee, PLLC
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