HB81

SECTION 1. The legislature finds that the collateral source rule has been established by case law and is not based upon statutory provisions. The legislature recognizes that collateral source payments occur whenever a plaintiff in a tort action receives compensation or benefits from a third party that is not involved in the litigation to compensate for damages the plaintiff sustained. The collateral source rule bars defendants from introducing evidence to show that a plaintiff has received collateral source payments. The legislature further believes that, in practice, collateral sources often do not spend the time and resources to track tort claims, which can take years to resolve. Consequently, a plaintiff's recovery is often duplicated to the extent the plaintiff received collateral source payments.

The legislature finds that, by repealing the collateral source rule, the injured person would be made whole for any economic loss, but double recovery would be eliminated, which would also lower auto insurance costs.

SECTION 2. Chapter 663, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§663- Collateral source rule; repealed; collateral source defined. (a) As used in this section, the term "collateral source" means any payments made to the plaintiff, or made on the plaintiff's behalf, by or pursuant to:

(1) The United States Social Security Act, except Title XVIII and Title XIX; any federal, state, or local income disability act; or any other public programs providing medical expenses, disability payments, or other similar benefits, except those prohibited by federal law and those expressly excluded by law as collateral sources;

(2) Any health, sickness, or income disability insurance; any automobile accident insurance that provides health benefits or income disability coverage; and any other similar insurance benefits, except life insurance benefits available to the plaintiff, whether purchased by the plaintiff or provided by others;

(3) Any contract or agreement of any group, organization, partnership, or corporation to provide, pay for, or reimburse the costs of hospital, medical, dental, or other health care services; or

(4) Any contractual or voluntary wage continuation plan provided for by employers or by any other system intended to provide wages during a period of disability;

provided that benefits received under medicare, or any other federal program providing for a federal government lien on or right of reimbursement from the plaintiff's recovery, the worker's compensation law, the medicaid program of Title XIX of the Social Security Act or from any medical services program administered by the department of health shall not be considered a collateral source.

(b) Evidence of collateral source payments introduced at trial shall be admissible. The court shall reduce the amount of an award by the total of all amounts that have been paid to the plaintiff, or that are otherwise available to the plaintiff, from a collateral source. The court shall offset the reduction by any amount paid by the plaintiff to secure the benefit from a collateral source."

SECTION 3. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.

SECTION 4. New statutory material is underscored.

SECTION 5. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	81
TWENTY-FOURTH LEGISLATURE, 2007
STATE OF HAWAII