Evidence of insurance at trial: Never say never | Allen and Allen

Evidence of insurance at trial: Never say never

In personal injury cases, deliberately injecting the concept of insurance into a trial is off-limits. With our clients, we caution them never to bring up insurance at trial.

insurance logos

This is because any mention of the existence of insurance can be cause for a mistrial. This general rule – that evidence of insurance is not permitted at trial – is well-established.

But personal injury attorneys take notice: Under certain circumstances, evidence of insurance can be introduced at trial. In two very important cases, the Supreme Court of Virginia has held that evidence of insurance is admissible upon cross-examination of a defense medical doctor for purposes of proving bias or prejudice.

When is evidence of insurance admissible in court?

Evidence of insurance may be admissible during a plaintiff’s cross-examination of a defense medical expert. Often, the defense in a personal injury case retains a medical expert to testify at trial and dispute the nature and extent of the plaintiff’s injuries, their relatedness to the crash, or both.

mallet in courtroom

Essentially, the defense has hired a doctor and is paying for their testimony. Under these circumstances, the fact that the doctor is being paid by the insurance company, including the amount, is relevant to the issue of whether the doctor’s testimony is biased or prejudiced. In many cases, it would be impossible to fully explore this potential for bias without questioning the doctor on their relationship with the insurance company.

Therefore, the Virginia Supreme Court has ruled that if a plaintiff can prove that a “substantial relationship” exists between the defense medical doctor and the insurance company, evidence of insurance is admissible. A cross-examination of the medical expert may be able to prove the witness’s potential for bias or prejudice.

In practice, this issue is often litigated in a hearing that takes place before the trial itself. Oftentimes, counsel for the plaintiff or defendant will file a motion in limine, which argues that evidence of insurance should be admitted at trial, or excluded, respectively. A motion in limine is a pretrial request for the court to rule on the admissibility of certain evidence and determine whether it should be allowed at trial.

insurance policy paperwork

What is the standard for allowing evidence of insurance?

Whether a plaintiff should be allowed to inject the concept of insurance into the trial “involves the tension between two established rules concerning admission of evidence.”

  • First, Virginia Rule of Evidence 2:403 states that a court may exclude relevant evidence “if the probative value of the evidence is substantially outweighed by . . . the danger of unfair prejudice.”
  • Second, Virginia Rule of Evidence 2:411 states that “evidence that a person was or was not insured is not admissible on the question of whether the person acted negligently or otherwise wrongfully.” However, this rule goes on to state that the “exclusion of evidence of insurance is not required when offered for another purpose, such as proof of . . . bias or prejudice of a witness.”

The Supreme Court of Virginia has resolved this “tension” in favor of a party’s right to properly cross-examine a witness regarding their potential bias, and it has permitted the introduction of evidence of insurance in cases where the plaintiff is able to demonstrate that a “substantial relationship” exists between an expert witness and the insurance carrier that is paying him or her.

In cases where the plaintiff proves a “substantial relationship” exists, the plaintiff is allowed to make reference to the payment from the insurance company during cross-examination of the defense medical expert. As the court has noted, this is not only “consistent with prior cases” and the law of Virginia, but it is also “the majority view in the United States.”

asian attorney helping with driver

What constitutes a “substantial relationship”?

The Supreme Court of Virginia has outlined the following test:

“The ‘crux of the issue’ in determining whether the evidence should be admitted is whether there is a substantial relationship between the witness and a particular insurance carrier that has a financial interest in the outcome of the case. If the plaintiff can demonstrate a substantial relationship, “its probative value concerning potential bias or prejudice outweighs any prejudice to the defendant resulting from the jury’s knowledge that the defendant carries liability insurance.”

In short, the best way to determine whether a “substantial relationship” exists is: Follow the money. This is because “the receipt of . . . a substantial amount by an expert [from an insurance company] is enough to create a potential for bias that outweighs any potential harm from the mention of insurance to a defendant.”

doctor partnering with insurance companyCase studies

The determination of whether a “substantial relationship” exists has been tested on appeal in two important Virginia Supreme Court cases, Lombard v. Rohrbaugh, and Graves v. Shoemaker.

Lombard v. Rohrbaugh

In Lombard v. Rohrbaugh, the plaintiff proved a substantial relationship existed between the defense medical doctor and the liability insurance carrier. The plaintiff showed that Allstate Insurance Company had paid its expert, Dr. Ammerman, $104,971 in 1999, and $106,520 in 1998, for testifying and performing medical legal work on behalf of its insureds.

On cross-examination, plaintiff’s counsel questioned Dr. Ammerman about past payments he received from Allstate, with specific reference to the existence of insurance. Ultimately, this form of cross-examination “was permitted over vigorous objection” because “the payments of over $100,000 per year for the years 1998 and 1999” served as proof of a substantial relationship between Dr. Ammerman and Allstate.

Further, “[i]n closing argument . . . counsel was permitted to mention the relationship between Dr. Ammerman and Allstate Insurance Company for the purpose of arguing that Dr. Ammerman’s testimony was biased.”

Graves v. Shoemaker

Then, in Graves v. Shoemaker, the court returned to deciding whether a “substantial relationship” existed. This time, the plaintiff sought to prove that a “substantial relationship” existed between the defense medical doctor, Dr. Andrews, and State Farm Insurance Company.

In Graves, the plaintiff’s counsel filed a pre-trial motion in limine seeking the court’s permission to introduce evidence of Dr. Andrews’ relationship with State Farm Insurance Company. This motion was based on the fact that Dr. Andrews had received “nearly $800,000 over the course of seven years from State Farm.”

The court determined that it was clear that a “substantial relationship” existed that could bias the expert witness. In fact, the court reversed the trial court’s ruling, which had permitted the plaintiff to introduce evidence regarding the number of times the defense medical expert had been hired by defense counsel but did not allow the plaintiff to expose the financial relationship between Dr. Andrews and State Farm.

On appeal, the Supreme Court of Virginia held that “the Circuit Court . . . abused its discretion in denying [plaintiff’s] motion in limine.”  This is because “on cross-examination,” a plaintiff deserves “great latitude . . . to show the bias on the part of a witness.”

doctor working with insurance company at trial

Never say never

Generally, insurance remains a topic that is off-limits at trial. However, plaintiff’s attorneys need to consider the effects of Lombard and Graves in preparing to cross-examine a defense medical expert.

The relationship between a defense doctor and the insurance company that hired them is always relevant on the issue of bias, and depending on their payment history, it just might open the door to allowing a discussion of insurance at trial.

The attorneys at Allen & Allen have experience navigating these issues at trial, and we are committed to helping our clients implement the best strategy for their cases. If you have been injured due to the negligence of another, give Allen & Allen a call today for a free consultation at 866-388-1307.