Is Nevada’s collateral source rule changing? – Lawsuits & Appeals & Compensation

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Nevada’s enforcement of its collateral source rule has been relatively strict. The only exception known to date is statutory and relates to workers’ compensation. But things could change given a recent Nevada Supreme Court ruling.

Nied vs. Nevada State is a criminal appeal stemming from a traffic accident following a wild night in Reno. The driver was found guilty, and during the sentencing process, the district court ordered the driver to pay the victim $459,147.26 in restitution for medical expenses and $4,678.33 for damage to the vehicle. The driver disputed this amount on appeal. First, he argued that restitution should be limited to out-of-pocket costs, such as co-payments. This argument was rejected.

The question of the source of guarantee

The driver’s second argument was that restitution “should be based, at most, on the negotiated amounts that the victim and the victim’s insurer actually paid, rather than the higher amounts that the medical providers originally billed but then cancelled”. The court accepted. He explained that restitution is designed to compensate a victim for costs incurred as a result of the crime: “As compensation is the primary objective, restitution is limited to the amount that adequately compensates a victim for any economic loss or expense necessary to make the victim whole, but without bringing any boon to the victim.” Therefore, restitution should have been based on the amount accepted by the medical providers as full payment for their services to the victim, rather than the amount billed.

denied then assessed whether the amount the driver’s car insurance company paid the victim should be deducted from the restitution amount, less attorney’s fees. He distinguished this scenario from a typical collateral-source argument, stating that “the reimbursement of the victim’s losses by the victim’s insurer is separate from the payments to the victim by the defendant’s insurer.”
denied concluded “a district court must offset the defendant’s restitution obligation against the amount that the defendant’s insurer paid the victim for the losses subject to the restitution order”.


This decision begs the question: if the amount paid to a victim’s medical providers, etc., is the appropriate measure for damages, and those same damages can be sued in tort, then why wouldn’t the amount paid to a plaintiff’s medical providers, etc., also be the measure of damages in tort? The denied The court further found that restitution should be set off against the amount paid by the defendant’s insurance company to the victim for the losses subject to the restitution order. Although some may argue that restitution is different from tort damages, denied decision seems to indicate an overlap, at least in this particular scenario. Defendants seeking to assert this position should pursue discovery to gather supporting evidence, but this is now perhaps debatable.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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