Damages and Valuation
Damages Doctrines
The collateral source rule is a common law doctrine providing that a defendant's liability is not reduced by benefits the plaintiff received from sources independent of the defendant, such as health insurance, disability benefits, or gratuitous care.
The rationale is that a wrongdoer should not benefit from the plaintiff's foresight in obtaining insurance. In practice the rule affects both what evidence the jury hears and how the judgment is calculated.
Alternative Names:
Collateral Source Doctrine
Why it Matters?
The rule is often the difference between a damages presentation built on billed charges and one built on amounts actually paid, which in medical-heavy cases can change exposure by a large multiple. Defense strategy on medical specials, lien resolution, and settlement valuation all depend on where the venue stands on this issue.
Frequently Confused with
Related terms
Frequently asked questions
Can the jury hear that a plaintiff's medical bills were paid by insurance?
Why does the billed versus paid distinction matter so much?
