Collateral Source Rule

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  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. Collateral

    Property or other assets that a borrower offers a lender to secure ...
  5. Co-Insurance

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

    A contract (policy) in which an individual or entity receives ...
Related Articles
  1. Is Your Insurance Company Going Belly ...
    Home & Auto

    Is Your Insurance Company Going Belly ...

  2. Bundle Your Insurance For Big Savings
    Home & Auto

    Bundle Your Insurance For Big Savings

  3. Will Filing An Insurance Claim Raise ...
    Insurance

    Will Filing An Insurance Claim Raise ...

  4. Selecting And Managing Insurance Payouts
    Insurance

    Selecting And Managing Insurance Payouts

Hot Definitions
  1. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  2. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  3. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  4. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  5. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
  6. Parity Price

    When the price of an asset is directly linked to another price. Examples of parity price are: 1. Convertibles - the price ...
Trading Center