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Colorado House Considers Bill That Would Limit Third-Party Liability

New legislation proposed in the Colorado legislature would change an age-old rule about the way evidence of damages is presented to juries in personal injury cases. Bill 1106, introduced by Colorado Springs Republican Bob Gardner, seeks to do away with the collateral source rule, which excludes evidence of compensation or indemnity paid to an injured party by a collateral source (that is, someone besides the accused wrongdoer in a civil claim).

At issue is whether a defendant can introduce evidence of how much a plaintiff's health insurance company paid for any medical services required to treat a personal injury. Under current law, the jury can consider how much a medical provider billed the plaintiff for medical services as evidence of the extent of damages. But the defendant may not demonstrate that the plaintiff is covered by insurance or how much the insurance company ultimately settled with the provider for the value of medical services. However, under a separate statutory provision, the court may subsequently reduce the jury's damages award by any amount contributed by insurance.

The proposed legislation appears to be a response to a 2010 Colorado Supreme Court opinion, Volunteers of America v. Gardenswartz, which affirmed the collateral source rule by holding that an injured invitee could recover damages for the full amount of billed medical expenses, rather than the far lesser amount paid by his insurer. The court will revisit the issue this term in Crossgrove v. Wal-Mart Stores, Inc., a case involving a delivery driver's work-related injury and the concept of third-party liability, which allows an employee to seek compensation beyond workers' compensation benefits.

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Eley Law Firm
2000 S. Colorado Blvd. No. 2-740
Denver, CO 80222

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