Hazard in the Courtroom: Moral Hazard's Ability to Explain an Insured's Behavior and What it Means for Federal Rules of Evidence Rule 411

Abstract

This note contends that considering evidence of insurance within a moral hazard framework may justify another look at the blanket exclusion of Federal Rules of Evidence Rule 411. Not only does moral hazard implicate the relevance of evidence of insurance in a negligence action, but it may also reveal that the evidence is not as prejudicial as many scholars and courts had originally supposed. As a result, Rule 411 could be over-exclusive in its application, excluding not only a wholly irrelevant part of insurance evidence - the wealth or ability-to-pay implication - but also the part of insurance evidence that implies an insured’s possible subjection to moral hazard. This note will discuss how the moral hazard part of insurance evidence is relevant, and how this evidence yields sufficient probative value to overcome any potential prejudice.