The collateral source rule is a legal doctrine in tort law that prohibits the admission of evidence showing that the plaintiff or victim has received compensation from sources other than the damages sought against the defendant. This rule ensures that the damages awarded to a plaintiff are not reduced by amounts already recovered from third parties, such as insurers.
Generally, the rule mandates that damages awarded to a plaintiff in court cannot be diminished by any compensation received from other sources, including health insurance and workers’ compensation. It also prevents a defendant from informing the jury that the plaintiff has already been compensated by private insurance.
However, there are exceptions to the rule. For instance, collateral source evidence may be admitted to rebut testimony that the plaintiff paid their own bills. These exceptions typically arise in medical malpractice claims or cases involving unpaid medical bills.
See e.g.: 32 CFR § 536.51 - Collateral source rule; 28 CFR § 94.25 - Collateral sources
[Last updated in July of 2024 by the Wex Definitions Team]