San Antonio Legal Advice

What is the Collateral Source Rule?

The collateral source rule is a common law rule that has been applied to personal injury cases to prevent a defendant, also known as a tortfeasor, from introducing evidence to a jury of collateral source payments (such as health insurance) that could reduce the defendant’s liability to an injured party. Its purpose was to hold the defendant liable for the entirety of his or her negligent behavior, rather than benefiting from a collateral source.
Does the Collateral Source Rule Still Exist in Missouri & Kansas?

Within the past few years, the collateral source rule has become a thing of the past, which has worked to reduce a plaintiff’s potential recovery if the plaintiff had the benefit of health insurance. The collateral source has been referred to as a windfall for the plaintiff. Unfortunately, the move away from the collateral source rule seems to have become a windfall for the defendant. In reality, the ones that are really benefitting are the big insurance companies.

The collateral source rule still exists but in a much more limited capacity. Now it only prevents defendants from introducing the source of the collateral payment. For example, a defendant can introduce evidence that out of $15,000 in medical expenses, only $5,000 was paid and the other $10,000 was adjusted or written off. The defendant, however, cannot introduce evidence of whether the plaintiff’s medical expenses were paid by private health insurance, Medicaid, or Medicaid.

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According to a June 24, 2012 article in the Philadelphia Enquirer, Senator Barbara Boxer asked car rental companies to make a public pledge “not to rent or sell any vehicles under safety recall until the defect has been remedied.” So far, only Hertz has agreed to the pledge, while their competitors rejected the challenge. For anyone planning to rent a car from one of those non-compliant companies, this means that the consequences of unrepaired mechanical defects, such as faulty seatbelt car wreck injuries or defective brakes whiplash, could not only mar their holiday fun-they could risk lives.

The Knoxville, Tennessee personal injury attorneys at the Law Offices of G. Turner Howard III believe car safety recalls should be heeded by both consumers and car rental companies, and hope that Hertz’s response may set a precedent for other auto rental companies to follow suit.

In a letter addressed to Sen. Boxer, Hertz said the pledge reflected a “long-standing Hertz policy.”

New legislation sponsored by Sens. Boxer and Charles Schumer would make it a legal issue, forcing car rental companies to stop renting recalled cars until needed repairs or modifications have been made. Rosemary Shahan, president of Consumers for Auto Reliability and Safety says

Hertz has been lobbying with her, Boxer and Schumer to write the policy into law.

A nationally publicized defective car accident lawsuit sparked Boxer’s challenge to car rental companies and the subsequent proposed legislation she co-authored. The case involved a malfunctioning rental car rented by two young college-age sisters in 2004. Jacquie and Raechel Houck were fatally injured in a rental car crash when they lost control of their Enterprise Rent-a-Car PT Cruiser due to leaking steering fluid. During the accident, a fire erupted under the hood and both women lost their lives. After protracted litigation, Enterprise admitted liability two years ago, and accepted a jury verdict that awarded $15 million to their family.

Shahan says that Enterprise and Avis Budget Group are two of several rental car companies seeking to water down the legislation. One of their suggested changes would make it possible for them to attend to repairs “as soon as practicable” rather than before renting the vehicles out to customers. Another change to the legislation would allow them to still rent out unrepaired cars as long as they let car-rental counter customers know about what repairs needed to be made.

Unfortunately, the hazardous vehicle rental risks go beyond the car rental counter, since many car rental companies also sell their previously rented cars on the used-car market. That means many cars will end up on roads and highways that have, in fact, been recalled, which translates to a greater risk of car accident injuries and fatalities across the country. It is, therefore, a case of both renter and buyer beware.

At the offices of Tennessee personal injury lawyerG. Turner Howard III , we do all we can to ensure that our clients who have suffered car accident injuries are informed of their rights and any car recalls that may pertain to their Tennessee car crash. If you or someone you love has been involved in defective rented car accident, call us today for a free consultation at 1-800-HURTLINE or complete our online contact form. We are compassionate, experienced aggressive legal representatives who can seek justice for your injuries.

The Law Offices of G. Turner Howard III
5915 Casey Drive
Knoxville, TN 37950