Collateral Source Rule


DEFINITION of 'Collateral Source Rule'

A common law rule of evidence pertaining to punitive or other damages awarded to a plaintiff for injury, illness or disability. The Collateral Source rule mandates that damages awarded in court cannot be reduced by any amount of other sources of income used to cover the damages suffered by the victim.

BREAKING DOWN 'Collateral Source Rule'

The Collateral Source rule is a legal edict that prevents evidence from being admitted in court that proves the plaintiff (or victim) is receiving compensation for injuries from other sources, such as insurance. This doctrine has been contested in court in recent years by those who feel that victims should not be able to sue tortfeasors again for damages that were already paid from another source.

  1. Compensatory Damages

    Money awarded to a plaintiff to compensate for damages, injury, ...
  2. Restitution Payments

    The payment of punitive damages that are owed as a result of ...
  3. Common Law

    In the United States, a body of unwritten laws based on precedents ...
  4. Insurance

    A contract (policy) in which an individual or entity receives ...
  5. Co-Insurance

    A co-sharing agreement between the insured and the insurer under ...
  6. Collateral

    Property or other assets that a borrower offers a lender to secure ...
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