What Is Tennessee’s Collateral Source Rule?

Experienced advocacy for Knoxville personal injury victims

Tennessee’s collateral source rule prevents defendants from using evidence of third-party payments or benefits to reduce a plaintiff’s recovery in a personal injury case. The rule’s goal is to ensure that victims receive the highest possible compensation for their losses. At Banks & Jones, we understand how your damage award is affected if other entities pay some of your expenses. We know how to maximize your settlement. Contact our Knoxville personal injury lawyers today to learn more.

How can we help?

What are the arguments for and against the collateral source rule in Tennessee?

Advocates of the collateral source rule argue that defendants should be held fully accountable for the harm they cause. They also claim that defendants shouldn’t be rewarded because an insurance company, the government, or other sources paid part of the plaintiff’s claim. Opponents of the collateral source rule argue that the rule helps victims obtain a double recovery for some of their damages.

Some states have enacted laws addressing the collateral source rule – but not Tennessee. Many insurance companies do have what are called “subrogation clauses,” requiring that the plaintiff reimburse their insurance company if they obtain a recovery for the amounts paid by the insurance company.

What sources can advance some of your expenses in personal injury actions?

Most injury victims seek medical help before their case is settled or resolved. They then ask their insurance company to pay the bills or that their employer (through the employer’s policies) pay the medical bills.

The defendant cannot introduce those payments into evidence to reduce the amount the defendant must pay. The collateral source rule also applies to governmental benefits, such as Social Security disability payments, and to any life insurance payments if a loved one died due to the fault of others.

Collateral sources normally pay for your medical bills. They could pay for the cost to repair or replace your car after a car crash. If you have the correct coverage, they could also pay for some of your lost wages.

Generally, insurance does not pay for your pain and suffering, scarring and disfigurement, loss of consortium, or any other personal damages.

Do I have an obligation to pay the collateral sources if I obtain a recovery in my Knoxville personal injury case?

Typically, if the person or business that provides payments for some of your damages (such as an insurance carrier) states in your policy or a contract that they have a right of subrogation, then you do need to reimburse the insurance carrier for the amount that you advanced. At Banks & Jones, our Knoxville personal injury lawyers will explain when and how the collateral source rule applies.

How does the collateral source rule apply when insurance companies pay discounted amounts in personal injury cases?

The amount hospitals and other medical providers charge varies, depending on whether you do or don’t have insurance. Generally, the cost is higher if you don’t have insurance. Several questions may then arise:

  • What amount of damages can you claim – the uninsured amount or the discounted insurance amount?
  • How much is the right of repayment (subrogation) – the amount the insurance company paid or the amount the healthcare providers charged?

At Banks & Jones, we’ll explain the answers to these questions, including any current statutes and case law.

How Banks & Jones can help you maximize your injury award

One way that our Knoxville personal injury lawyers help is by working with your healthcare providers. If you don’t have your own healthcare insurance or you have high deductibles, we often negotiate with the hospital, physician, or other healthcare provider to have them defer billing you until there is a jury verdict in your favor or your case settles.

We may also make an arrangement that the bill be reduced by the amount of our contingency fee – because we have to do the work to get them paid. For example, if your doctor’s bill is $10,000 and your case settles for $90,000, normally, the distribution would be as follows based on a one-third contingency fee:

  • We receive $30,000.
  • You receive $60,000.
  • You pay the doctor $10,000, which leaves you with $50,000.

By negotiating our fee with the doctor, the distribution would work as follows:

  • We receive $30,000
  • You receive $60,000.
  • You pay the physician $6,667 (the $10,000 minus a reduction if the contingency fee is 1/3 because we obtained the settlement). You’re left with $53,333.

Do you have a Knoxville injury lawyer near me?

We make it easy for you to meet with us. Our lawyers meet clients at our Knoxville office located at 2125 Middlebrook Pike. If you’re unable to physically come to our office, we do make alternate arrangements. We also discuss cases by phone and through video conferences.

Our lawyers will explain your rights, answer your questions, and aggressively pursue your accident claim.

T0 Speak with our experienced Knoxville workers’ compensation lawyers today

You can’t wait until there’s a verdict or your case settles. You need money now to pay your doctors and your bills. At Banks & Jones, we understand how to negotiate with the people and businesses that advance your costs and how to confront the insurance companies and defense lawyers who will try to reduce your recovery. Please call us or use our contact form to schedule a free consultation.