On July 20, 2012, the Supreme Court of the State of Utah (“Utah Supreme Court”), Utah’s highest appellate court, overturned a verdict in favor of the defendants in a medical malpractice case tried before a jury in 2008. The Utah Supreme Court found that the lawyers for the medical malpractice defendants repeatedly violated a pre-trial order that precluded them from mentioning during trial that the medical malpractice plaintiffs’ medical expenses were paid by third-party sources.
In Utah, as in many states in the U.S., there is a rule called the collateral source rule, which provides “a wrongdoer is not entitled to have damages, for which he is liable, reduced by proof that the plaintiff has received or will receive compensation or indemnity for the loss from an independent collateral source.” There are two public policies underlying the rule: “First, public policy favors giving the plaintiff a double recovery rather than allowing a wrongdoer to enjoy reduced liability simply because the plaintiff received compensation from an independent source” and second, “the rule encourages the maintenance of insurance” by assuring that “a plaintiff’s payments from a collateral source will not be reduced by a subsequent judgment.”
However, Utah has modified the collateral source rule in medical malpractice cases so that “[u]pon a finding of liability and an awarding of damages by the trier of fact,” the trial judge (not the jury) “shall reduce the amount of the award by the total of all amounts paid to the plaintiff from all collateral sources which are available to him,” but nonetheless prohibits any reduction in a damages award for collateral sources that have subrogation rights. UTAH CODE § 78B-3-405(1)–(2).
In the Utah case before the Utah Supreme Court, the defendants’ medical malpractice attorneys impermissibly questioned the plaintiffs and their witnesses regarding medical expense payments made on their behalf by Medicaid and by their private health insurance by persistently and deliberately referencing the plaintiffs’ limited out-of-pocket expenses in their cross-examination of the plaintiffs and their witnesses.
The Utah Supreme Court also found that it was improper for the lawyers for the medical malpractice defendants to speak with the plaintiffs’ treating physician ex parte (without the plaintiffs’ lawyers present) without first notifying and obtaining consent from the plaintiffs. However, it was not improper for the lawyers for the medical malpractice defendants to meet ex parte with treating physicians employed by the medical malpractice defendants because the plaintiffs were seeking to hold the corporate defendant vicariously liable for the employee-physicians’ alleged medical malpractice (“While the public correctly expects that information disclosed to a physician will not be shared with third parties absent legal process, they do not have a similar expectation with respect to information shared between a physician and his hospital-employer. Because the patient has impliedly consented to disclosure and disclosure does not violate the settled expectations of patients, ex parte meetings with the Employed Physicians do not implicate the policy concerns…”)
In stating its holding in the case before it, the Utah Supreme Court stated, “In summary, IHC met ex parte with two categories of treating physicians, those it did not employ and those it did. IHC’s ex parte meetings with Dr. Boyer, whom IHC did not employ, were improper. However, its ex parte meetings with the Employed Physicians were permissible to the extent that the Wilsons placed the conduct of the Employed Physicians at issue under a theory of vicarious liability.”
Source Wilson, et al. v. IHC Hospitals, Inc., et al., 2012 UT 43
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