Minnesota Reduces a Verdict Three Times, in a Fixed Order — and the Order Is Worth Real Money

A Minnesota jury returns a verdict. That number is not what the plaintiff receives, and everyone knows it. What far fewer people can state from memory is the order in which the reductions happen — and in Minnesota the order is set by statute, it is not intuitive, and getting it wrong costs the plaintiff a percentage of every dollar.

Three separate reductions can apply to the same verdict:

1. Collateral sources — money already paid to or for the plaintiff by insurers, public programs, and wage-continuation plans. Minn. Stat. § 548.251.
2. Comparative fault — the plaintiff’s own share of responsibility. Minn. Stat. § 604.01.
3. Settlements and advance payments — money already paid by or on behalf of a defendant. Minn. Stat. § 604.01, subd. 5.

Reduction 1 happens before reduction 2. Reduction 3 happens after it. Both of those sequencing rules are written into the statutes, and the arithmetic difference between them is the plaintiff’s fault percentage multiplied by the amount at issue.

There is also a ten-day fuse in the middle of it that starts running on a trigger that appears almost nowhere else in Minnesota practice.

The first question: how much does the defendant owe?

Minn. Stat. § 604.01, subd. 1 is Minnesota’s modified comparative fault rule:

Contributory fault does not bar recovery in an action by any person or the person’s legal representative to recover damages for fault resulting in death, in injury to person or property, or in economic loss, if the contributory fault was not greater than the fault of the person against whom recovery is sought, but any damages allowed must be diminished in proportion to the amount of fault attributable to the person recovering. The court may, and when requested by any party shall, direct the jury to find separate special verdicts determining the amount of damages and the percentage of fault attributable to each party and the court shall then reduce the amount of damages in proportion to the amount of fault attributable to the person recovering.

“Not greater than” is the operative phrase. A plaintiff who is 50 percent at fault recovers, diminished by half. A plaintiff who is 51 percent at fault recovers nothing. The line is drawn between equality and excess, and it is drawn against the fault “of the person against whom recovery is sought.”

“Fault” is defined broadly, and subdivision 1a is worth reading in full because it sweeps in things people do not think of as fault at all:

“Fault” includes acts or omissions that are in any measure negligent or reckless toward the person or property of the actor or others, or that subject a person to strict tort liability. The term also includes breach of warranty, unreasonable assumption of risk not constituting an express consent or primary assumption of risk, misuse of a product and unreasonable failure to avoid an injury or to mitigate damages, and the defense of complicity under section 340A.801. Legal requirements of causal relation apply both to fault as the basis for liability and to contributory fault. The doctrine of last clear chance is abolished.

Three things in that paragraph decide cases.

Strict liability and breach of warranty are “fault.” A claim that does not sound in negligence is still subject to comparative reduction.

Assumption of risk is in — but only the unreasonable, secondary kind. The definition carves out risk assumption “constituting an express consent or primary assumption of risk.” Those remain separate doctrines, not percentages on a special verdict form.

Failure to mitigate is fault, and the statute then quarantines it. The very next paragraph:

Evidence of unreasonable failure to avoid aggravating an injury or to mitigate damages may be considered only in determining the damages to which the claimant is entitled. It may not be considered in determining the cause of an accident.

That is a genuine limitation with a practical edge. A defendant arguing that the plaintiff skipped physical therapy is making a damages argument. It is not admissible to prove who caused the collision, and a special verdict form that lets the jury fold post-accident conduct into the causation percentages is doing something the statute forbids.

And last clear chance is gone, by one sentence, since the comparative fault act.

Owing it and collecting it are different questions

Minn. Stat. § 604.02, subd. 1 sets the default and the exceptions:

When two or more persons are severally liable, contributions to awards shall be in proportion to the percentage of fault attributable to each, except that the following persons are jointly and severally liable for the whole award:

(1) a person whose fault is greater than 50 percent;

(2) two or more persons who act in a common scheme or plan that results in injury;

(3) a person who commits an intentional tort; or

(4) a person whose liability arises under chapters 18B - pesticide control, 115 - water pollution control, 115A - waste management, 115B - environmental response and liability, 115C - leaking underground storage tanks, and 299J - pipeline safety, public nuisance law for damage to the environment or the public health, any other environmental or public health law, or any environmental or public health ordinance or program of a municipality as defined in section 466.01.

Several liability is the rule; joint and several liability is the exception, and the first exception has a threshold — greater than 50 percent, which is not the same number as the plaintiff’s 51 percent bar in § 604.01, though the two are often conflated.

Subdivision 2 supplies the safety valve when a defendant cannot pay: “Upon motion made not later than one year after judgment is entered, the court shall determine whether all or part of a party’s equitable share of the obligation is uncollectible from that party and shall reallocate any uncollectible amount among the other parties, including a claimant at fault, according to their respective percentages of fault.”

Note that the reallocation runs to “the other parties, including a claimant at fault.” The plaintiff absorbs a share of the uncollectible amount too. And note the deadline: one year after judgment is entered, on motion.

The second question: how much does the plaintiff keep?

This is where § 548.251 comes in, and it operates in a proceeding the jury never sees.

Subdivision 1 defines “collateral sources” as payments related to the injury or disability in question made to the plaintiff, or on the plaintiff’s behalf up to the date of the verdict, by or pursuant to four categories: public disability or workers’ compensation programs and other public programs providing medical expenses, disability payments, or similar benefits; health, accident and sickness, or automobile accident or liability insurance providing health benefits or income disability coverage; a contract or agreement of a group, organization, partnership, or corporation to provide, pay for, or reimburse health care costs; and a contractual or voluntary wage continuation plan.

The exclusions are written into the categories themselves, and they matter:

• Category (2) excludes “life insurance benefits available to the plaintiff, whether purchased by the plaintiff or provided by others, payments made pursuant to the United States Social Security Act, or pension payments.”
• Category (4) excludes “benefits received from a private disability insurance policy where the premiums were wholly paid for by the plaintiff.”

“Wholly paid for by the plaintiff” is a strict condition. A disability policy paid partly by an employer does not fit that exclusion on the face of the statute.

The ten-day fuse, and what it runs from

Subdivision 2:

In a civil action, whether based on contract or tort, when liability is admitted or is determined by the trier of fact, and when damages include an award to compensate the plaintiff for losses available to the date of the verdict by collateral sources, a party may file a motion within ten days of the date of entry of the verdict requesting determination of collateral sources. If the motion is filed, the parties shall submit written evidence of, and the court shall determine:

(1) amounts of collateral sources that have been paid for the benefit of the plaintiff or are otherwise available to the plaintiff as a result of losses except those for which a subrogation right has been asserted; and

(2) amounts that have been paid, contributed, or forfeited by, or on behalf of, the plaintiff or members of the plaintiff’s immediate family for the two-year period immediately before the accrual of the action and until judgment is entered to secure the right to a collateral source benefit that the plaintiff is receiving as a result of losses.

Four features of that subdivision are easy to miss.

First, the trigger is “entry of the verdict,” not entry of judgment. Unlike the post-trial clocks most litigators carry in their heads, this one runs from entry of the verdict, and a firm whose post-trial checklist is organized around judgment entry will be late.

Second, the count is a plain calendar count. Minn. R. Civ. P. 6.01(a) governs “any time period specified in these rules, in any local rule or court order, or in any statute that does not specify a method of computing time,” and § 548.251 specifies no method. So Rule 6.01(a)(1) applies: exclude the triggering day, “count every day, including intermediate Saturdays, Sundays, and legal holidays,” and if the last day falls on a Saturday, Sunday, or legal holiday, the period runs to the end of the next day that is not. Rule 6.01(a)(2) allows weekends and holidays to be excluded only for periods shorter than seven days and only where expressly provided; ten days is not one of those. Two weekends are inside this window.

Third, “a party may file” — either party. The defendant files it to obtain the reduction. But the plaintiff has a stake in the same motion, because clause (2) is the plaintiff’s offset, and clause (2) requires evidence the plaintiff has to produce: what the plaintiff and the plaintiff’s immediate family paid to secure the benefit.

Fourth — and this is recent — clause (2) was amended in 2024 to extend the offset window. The Legislature added the words “and until judgment is entered,” so the offset now covers what was paid “for the two-year period immediately before the accrual of the action and until judgment is entered.” The session law provides: “This section is effective August 1, 2024, and applies to causes of action commenced on or after that date.” 2024 Minn. Laws ch. 123, art. 15, s. 13.

Read that effective-date clause carefully, because it does not turn on when the trial happens. It turns on when the cause of action was commenced. A case commenced in 2023 and tried in 2026 gets the old, narrower offset window. A case commenced in 2025 gets the new one. Two trials on the same calendar can be governed by different versions of the same clause.

The sentence that fixes the order

Subdivision 3 tells the court what to do with the numbers:

(a) The court shall reduce the award by the amounts determined under subdivision 2, clause (1), and offset any reduction in the award by the amounts determined under subdivision 2, clause (2).

(b) If the court cannot determine the amounts specified in paragraph (a) from the written evidence submitted, the court may within ten days request additional written evidence or schedule a conference with the parties to obtain further evidence.

(c) In any case where the claimant is found to be at fault under section 604.01, the reduction required under paragraph (a) must be made before the claimant’s damages are reduced under section 604.01, subdivision 1.

Paragraph (c) is the whole ballgame, and it is one sentence long. Collateral sources come off the gross verdict first. The comparative fault percentage is applied to the reduced figure.

That sequence is materially better for the plaintiff than the reverse, and the reason is arithmetic. Here is an illustration. The numbers are invented and describe no actual case; they are here only to show the mechanics.

Assume a jury awards $500,000 and finds the plaintiff 30 percent at fault. A health plan paid $100,000 in medical bills and asserted no subrogation right. The plaintiff and her spouse paid $10,000 in premiums within the statutory window.

Difference: $27,000 — exactly the net collateral reduction ($90,000) multiplied by the fault percentage (30 percent).

The general rule falls out of that: because the collateral-source deduction is taken from the gross verdict, the defendant effectively absorbs its share of that deduction in proportion to its own fault. The plaintiff does not eat the whole thing.

Now compare the third reduction, which runs the other way. Section 604.01, subd. 5 governs settlements and advance payments:

All settlements and payments made under subdivisions 2 and 3 shall be credited against any final settlement or judgment; provided however that in the event that judgment is entered against the person seeking recovery or if a verdict is rendered for an amount less than the total of any such advance payments in favor of the recipient thereof, such person shall not be required to refund any portion of such advance payments voluntarily made. Upon motion to the court in the absence of a jury and upon proper proof thereof, prior to entry of judgment on a verdict, the court shall first apply the provisions of subdivision 1 and then shall reduce the amount of the damages so determined by the amount of the payments previously made to or on behalf of the person entitled to such damages.

Emphasis added. First the fault reduction, then the settlement credit. The opposite sequence from collateral sources.

A dollar paid by the plaintiff’s health plan and a dollar paid by a settling defendant are both dollars the plaintiff has already received. Minnesota treats them differently, and the difference is the plaintiff’s fault percentage.

The subrogation carve-out is the practical lever

Go back to subdivision 2, clause (1): the court determines amounts paid or otherwise available to the plaintiff “except those for which a subrogation right has been asserted.”

That clause decides who keeps the money.

• Subrogation asserted: the amount is not deducted from the verdict, and the plaintiff owes the subrogated payor out of the recovery.
• No subrogation asserted: the amount comes off the verdict, and the defendant’s exposure drops by that amount, reduced by its fault share.

Whether the plaintiff’s health plan bothers to assert its rights therefore has a direct effect on what the defendant pays. That is not a detail to discover in the ten days after a verdict. It is something to establish, in writing, during the case.

Subdivision 4 adds a related point that clients ask about and lawyers should raise first: “If the fees for legal services provided to the plaintiff are based on a percentage of the amount of money awarded to the plaintiff, the percentage must be based on the amount of the award as adjusted under subdivision 3.” The contingent fee is computed on the adjusted award. The same subdivision provides that “[a]ny subrogated provider of a collateral source not separately represented by counsel shall pay the same percentage of attorney fees as paid by the plaintiff and shall pay its proportionate share of the costs.”

And subdivision 5 keeps the whole apparatus away from the jury: “The jury shall not be informed of the existence of collateral sources or any future benefits which may or may not be payable to the plaintiff.” That is why this is a post-verdict motion in the first place.

The Revisor’s note on subdivision 1, clause (3)

The Revisor’s published text of § 548.251 carries a bracketed “[See Note.]” immediately after subdivision 1. The note reads, in full:

NOTE: Subdivision 1, clause (3) (formerly section 548.36, subdivision 1, clause (3)), was found preempted by the federal Employee Retirement Income Security Act (ERISA) as applied to ERISA benefits plans in Koch v. Mork Clinic, P.A., 540 N.W.2d 526 (Minn. Ct. App. 1995), rev. denied (Jan. 12, 1996).

Be precise about what that is and is not. It is an editorial annotation published by the Office of the Revisor of Statutes, not statutory text. The Legislature has not repealed or amended clause (3) in response to it; clause (3) still appears in the current statute. What the note tells a practitioner is that the reach of clause (3) as applied to an ERISA plan has been the subject of a preemption holding by the Minnesota Court of Appeals, and that anyone proposing to deduct ERISA-plan payments as a collateral source needs to read that decision rather than the statute alone. This page does not summarize the holding, and nobody should treat a Revisor’s note as a substitute for the opinion.

What to do

Before trial:

1. Get the collateral-source picture in writing during discovery, including whether each payor has asserted subrogation. That single fact moves money between the parties.
2. Collect premium-payment proof early. The subdivision 2, clause (2) offset requires evidence of what the plaintiff and the plaintiff’s immediate family paid to secure the benefit. Assembling that in the ten days after a verdict is a bad plan.
3. Check when the cause of action was commenced. If it was commenced before August 1, 2024, the pre-amendment version of clause (2) applies and the offset window is narrower.
4. Build the special verdict form with subdivision 1a in mind — particularly the rule that failure to mitigate goes to damages only and “may not be considered in determining the cause of an accident.”

In the ten days after the verdict:

5. Calendar the deadline from entry of the verdict, not from judgment, and count every day including weekends under Minn. R. Civ. P. 6.01(a)(1).
6. Do the arithmetic in the statutory order — collateral sources off the gross verdict, then comparative fault, then settlement credits under § 604.01, subd. 5 — and check the proposed judgment against it before it is entered.

After judgment:

7. Watch the one-year reallocation window in § 604.02, subd. 2 if any defendant’s share is uncollectible, and remember that a claimant at fault absorbs part of the reallocation.

Two related Minnesota timing problems are worth reading alongside this one: the way preverdict interest is priced by the parties’ written settlement offers under § 549.09, and the broader family of Minnesota deadlines that run from a fact rather than a docket entry.

The observation

The usual way to describe Minnesota’s system is that the jury decides damages and the court cleans up afterward. That description is backwards about where the money is.

The jury answers one question: what was the harm, and who caused it. Every other question — what has already been paid, by whom, whether anyone asserted a right to be repaid, what the plaintiff paid to have coverage in the first place, and in what order all of it is subtracted — is answered in a written proceeding that takes place after the verdict, on a ten-day fuse, in front of a judge, on paper.

There is no closing argument in that proceeding. There is only the record you built during the case. A trial lawyer who wins the verdict and loses the collateral-source motion has done the hard part and given away the easy part, and the client will not experience the distinction as a technical one.

Madgett Law, LLC handles civil litigation in Minnesota state and federal court, including the post-verdict practice that determines what a judgment is actually worth. If you have a verdict, a pending trial, or a claim where insurance payments and fault allocation are in play, send us a message or call 612-470-6529.

Sources: Minn. Stat. § 604.01 (comparative fault; effect) — subd. 1 (the “not greater than” bar and diminution in proportion to the claimant’s fault; special verdicts); subd. 1a (definition of “fault,” including breach of warranty, unreasonable assumption of risk not constituting express consent or primary assumption of risk, misuse of a product, and unreasonable failure to avoid injury or mitigate damages; complicity under § 340A.801; abolition of last clear chance; and the limitation that mitigation evidence “may not be considered in determining the cause of an accident”); subds. 2–4 (settlements and payments are not admissions of liability and are inadmissible except where settlement and release is pleaded as a defense); subd. 5 (credit for settlements and advance payments; no refund obligation; and the direction that the court “shall first apply the provisions of subdivision 1 and then shall reduce” damages by prior payments). Minn. Stat. § 604.02 (apportionment of damages) — subd. 1 (several liability with four joint-and-several exceptions, including fault greater than 50 percent); subd. 2 (reallocation of uncollectible amounts on motion made not later than one year after judgment is entered, including reallocation to a claimant at fault). Minn. Stat. § 548.251 (collateral source calculations) — subd. 1 (four categories and their exclusions for life insurance benefits, Social Security Act payments, pension payments, and private disability benefits where premiums were wholly paid by the plaintiff), together with the Revisor’s bracketed “[See Note.]” annotation and the note quoted above referencing Koch v. Mork Clinic, P.A., 540 N.W.2d 526 (Minn. Ct. App. 1995), rev. denied (Jan. 12, 1996); subd. 2 (motion within ten days of the date of entry of the verdict; the subrogation exception; and the premium offset); subd. 3(a)–(c) (reduction, offset, and the requirement that the collateral-source reduction be made before reduction under § 604.01, subd. 1); subd. 4 (contingent fees computed on the adjusted award; subrogated providers’ share of fees and costs); subd. 5 (jury not informed). 2024 Minn. Laws ch. 123, art. 15, s. 13 (amending § 548.251, subd. 2, to add “and until judgment is entered”; effective August 1, 2024, and applicable to causes of action commenced on or after that date) — session law text from the Revisor’s published chapter. Minn. R. Civ. P. 6.01(a)(1) and (a)(2) (computation of time; application to a statute that does not specify a method of computing time). All from the Minnesota Office of the Revisor of Statutes, 2025 Minnesota Statutes and 2024 Session Laws. Currency check: the Revisor’s Table 2 shows no entries at all for § 604.01, the most recent entry for § 604.02 as the 2003 Regular Session, and the most recent entry for § 548.251 as the 2024 Regular Session amendment described above; there are no 2025 or 2026 session entries for any of these sections.

The arithmetic example above uses invented figures and is included only to illustrate the effect of the statutory sequence. This article is general legal information about Minnesota law, not legal advice, and reading it does not create an attorney–client relationship. How any particular verdict is reduced depends on the record, the parties, the payors, and the date the action was commenced. Do not use this article to compute a deadline or a judgment amount in your own matter. No outcome is promised or implied.