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Collateral Source Rule

The Collateral source rule keeps information from being presented to the court regarding an individual's damages and how they may be compensated by someone other than the defense. An example might be if a man is injured and his insurance company has paid three fourts of his medical bills, but he is still seeking damages against the individual or company that caused the injury. Collateral source rule keeps that information out. While some states have adjusted their laws so that individuals must pay a certain amount back to insurance companies, most people feel that entering the information and allowing the defendent to get off easier is not fair. Since damages are part of a punishment and justice procedure, in most courts the compensation from insurance companies is not a factor.

Fast Facts

  • The Collateral Source Rule dates back to the 1800's, designed to hold a transgressor responsible.
  • If the Collateral Source Rule were not in effect, many believe victims would not be adequately compensated by the transgressor for his or her suffering, etc.

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