Collateral Source Rule

In torts - that is, the area of law dealing with injury and/or criminal or civil wrongdoing that furnishes the grounds for a lawsuit - the collateral source rule states that the amount of damages that a court awards to a plaintiff may not be reduced by payments made to the plaintiff by other parties or from other sources. More specifically, it prohibits evidence of payments made to the plaintiff by third parties from being entered into evidence.

For example, in a case of worker-related injury, it is possible that the plaintiff's medical bills were paid by his/her health insurer. In addition, most states offer some type of worker's compensation. Under the collateral source rule, neither of these payments may be admitted into evidence and used as credit against the amount of damages owed by the defendant.

The doctrine of collateral source dates back over 150 years. The principle behind the doctrine was to ensure that a party at fault was held responsible for any negligence or wrongdoing and that justice was served.

In today's pro-corporate, anti-worker political and legal climate, this doctrine has come under attack under the guise of "tort reform." The argument on the part of corporatists is that if the plaintiff has already been compensated, it is unfair and redundant to award damages against the defendant.

Nearly half of the states in the U.S. now have laws allowing the consideration of collateral sources .

 

 

 

 

 
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