Applying Virginia’s Collateral Source Rule to Insurance Defense Medical Experts

For plaintiffs’ lawyers in Virginia, facing a medical expert hired by the defense’s insurer poses a number of problems. Among them is the application of Virginia’s Collateral Source Rule. This rule prohibits plaintiffs and their attorneys from discussing the defendant’s status as an insured party. As a result, this also precludes speaking on whether the defendant’s medical expert is a hired gun.

However, there is an exception to the Collateral Source Rule. Here, we’re discussing the rule’s limits and how plaintiffs may leverage this. In particular, VA attorneys should understand how to surface this often-relevant relationship among a defendant, medical expert, and insurer.

Virginia’s Collateral Source Rule

Virginia’s Collateral Source Rule, Va. R. Sup. Ct. 2:411, begins with the statement that “Evidence that a person was or was not insured is not admissible on the question whether the person acted negligently or otherwise wrongfully, and not admissible on the issue of damages.”

Virginia courts interpret this rule to include discussions about the origin of a defendant’s medical expert. Here, the plaintiff may not introduce the fact that the defendant’s insurer hired a defendant’s medical expert to testify. Specifically, the plaintiff party cannot state the expert’s sole purpose is to challenge the plaintiff or their own medical expert.

This prohibition against mentioning the source of a defense medical expert’s compensation can pose problems for plaintiffs and their attorneys. The fact that a defense expert witness is compensated by an insurance company can influence jurors’ perception of that expert’s credibility. This is particularly likely to be true when the defense’s medical expert wouldn’t have been hired at all had the plaintiff not sought out their own expert.

An Exception to the Collateral Source Rule

Virginia’s Collateral Source Rule does, however, contain an exception. The second half of the rule reads “But exclusion of evidence of insurance is not required when offered for another purpose, such as proof of agency, ownership, or control, or bias or prejudice of a witness.”

Questions of agency, ownership, or control may be rare when discussing an opinion offered by an expert witness. Though questions of bias or prejudice are comparatively common. Consider a scenario where an insurer hires a defense medical expert solely to refute a plaintiff’s medical expert. The defendant’s expert will be particularly susceptible to bias or prejudice. Their role in the case is to push back against the plaintiff’s medical expert. They’ll take this stance whether or not their pushback aligns with industry norms. What’s more, their testimony may even go against best-known science, best practices for medical study, or standard of care in the medical field.

In Lombard v. Rohrbaugh, 262 Va. 484, 497(2001), the Virginia Supreme Court held that a plaintiff can introduce the fact that a defendant’s medical expert is paid by the defendant’s insurer. The court explained this is only if the plaintiff can show a “substantial connection” between the insurance payments and the medical expert’s work.

Revealing Hired-Gun Medical Experts Within the Bounds of Virginia Law

In Lombard, the plaintiff suffered injuries in a car collision. The defendant was at fault for the incident. When the plaintiff sued the defendant, the defendant’s insurance company paid for the costs of their legal defense. These included hiring a medical expert witness to examine the plaintiff.

At trial, the defendant’s medical expert testified that a preexisting condition caused the plaintiff’s injuries, not the accident. Discovery information-gathering, however, revealed that the defendant’s expert regularly served as a medical expert. The expert was a frequent witness in cases at the defendant’s insurance company’s behest. In fact, the insurer paid this expert over $100,000 in each of two consecutive years prior for their services.

VA Supreme Court’s Decision

The Virginia Supreme Court held that this evidence of large payments over two consecutive years showed a “substantial connection” between the insurer and medical expert. Further, it explained that this relationship could demonstrate bias and prejudice. The court also recognized that bringing up the expert-insurer relationship can violate the collateral source rule. However, it reasoned that a substantial connection between the expert and insurer exists demonstrating bias or prejudice is an outlier. The court found the probative value of that information sufficiently outweighs its prejudicial value to justify creating an exception.

As such, Virginia plaintiffs and their lawyers must explore the relationship between the opposition’s medical expert and insurer during discovery. Understanding the extent to which the two have worked together in the past and in what contexts are crucial. This can also help establish whether the “substantial connection” exception applies in the plaintiff’s specific case.