Collateral Source Rule


  • A rule used in tort law which states that the tortfeasor cannot deduct payments made from third parties (a la insurance companies) from the amount that they are required to pay. In layman terms, if an individual is injured due to the actions of another and the injured party has insurance that covers the damages, the liable party is not allowed to deduct the value of the insurance benefits from any settlements in a civil trial. In some cases, the collateral source rule essentially allows the injured party to be paid twice for the same injury.

injury claim ruling, rule of tort law, collateral source doctrine

Related Terms and Acronyms

  • Plaintiff Definition,
    • The party who initiates a lawsuit.
  • Settlement Definition,
    • An agreement between the parties of a legal case.
  • Settlement Statement Definition,
    • A document that details who has paid how much to whom.
  • Tort Law Definition,
    • Civil law or the laws that govern civil lawsuits.
  • Tortfeasor Definition,
    • A party who commits a tort (a civil wrong).
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