Clients often ask how compensatory damages are calculated and awarded by juries in Alabama.  These damages are based primarily on the medical expenses a plaintiff incurs during the post-collision recovery period.  How those expenses are presented to a jury can often greatly affect the ultimate outcome of the case. This blog addresses the rules which control how medical bills are presented and calculated in court, better known as the “Collateral Source Rule.” A clear understanding of this rule and the reasons behind it is vital to presenting a persuasive case to the jury.

A Glimpse into History 

The “Collateral Source Rule” has deep-rooted origins in the American legal system. Traditionally, this rule barred defendants from introducing evidence at trial that the plaintiff received compensation for their injuries from other sources, like insurance. The reason? To ensure that defendants wouldn’t benefit from the plaintiff’s prudence in securing such coverage and ensure fairness.

The Tide Turns: Changes in Alabama

In the past, Alabama rigidly followed the traditional Collateral Source Rule. However, due to lobbying by insurance company interests, Alabama modified its stance. This shift allowed, under certain circumstances, the introduction of evidence showing the plaintiff had received benefits from sources like medical insurance and disability coverage. The argument was that an individual should not recover twice from the same loss. It ignored the fact the plaintiff had paid for or earned their benefits and the rule benefited the wrongdoer.  This is based on the general principle that an individual should not recover twice for the same loss.

The Current Landscape

Today, the change in the Collateral Source Rule in Alabama has complicated the presentation of evidence and confused the issues. On one hand, the courts now allow the defendant’s argument that a plaintiff should not be overcompensated for their losses. However, there also much be a recognition of the plaintiff’s perspective and rights; the injured party paid insurance premiums, so why should they be denied the right to receive the benefits they purchased? And why should the responsible party benefit?

If a person injured in an accident had medical bills covered by their insurance, the defendant now argues that they should not be required to pay for medical bills that the insurance already covered. Yet, the counterpoint is clear. Prior to their injury, the injured party paid insurance premiums for years, possibly without ever making a claim.  Fairness would dictate that they benefit from the coverage they purchased. The course have had a difficult time administering this poorly conceived deviation from common law.

Challenges in Courtroom Implementation

The modification of the rule in Alabama hasn’t been without its challenges. Courts often grapple with:

  • Fairness Issues: There’s a risk of jurors reducing damage awards unfairly if they know an insurance company has already compensated the plaintiff.
  • Complexity: Differentiating between types of collateral sources and the intricacies of their payment structures can be bewildering for juries.
  • Potential for Bias: Knowing a plaintiff has insurance might bias a juror into thinking the plaintiff is “double-dipping” or being greedy, where that’s often far from the truth.
  • Medical Billings: The escalating billings from medical providers are not covered by the legal profession and can hardly be understood.  However, if a defendant causes an injury, their obligation is for the damage caused; it is not redressed by third party payments.

See What Gary Bruce Says About Collateral Source Rule in Alabama

Gary Bruce, an injury attorney serving Columbus, Georgia, Phenix City, Alabama, and Ft. Moore, Georgia, discusses collateral source law in Alabama in a recent episode of “Legal Break” on WTVM’s local news show. Collateral source rule is intended to ensure fairness. Following complaints of high litigation costs, Alabama decided to modify their stance on the traditional rule. For a free consultation to discuss your options with your case in the Columbus, Georgia, Phenix City, Alabama, and Ft. Moore, Georgia area, contact us at the Law Offices of Gary Bruce, (706) 576-4279 and we will help you fight for what you deserve. This link will take you to the video:

A Word to the Wise

While the Collateral Source Rule’s landscape in Alabama offers a nuanced perspective on compensating victims, it is clear that navigating its intricacies can be complex. The courts continue to evolve in their understanding, and fairness remains a pivotal concern.