Collateral Source Rule

Definition

• 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.

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

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).