Collateral Source Rule

Collateral Source Rule
See also
Collateral Source Rule
See also

Collateral Source Rule - is one of the element of the American Law System. Traditional definition of Collateral Source Rule is that it prohibited insight into evidence of recompense an injured person who received compensation from other source than tortfeasor. It follows that the wrongdoer does not testify a benefits because a plaintiff received compensation from an insurance policy because those compensation would not be deducted from benefits. However, many states of America have repealed tradition Collateral Source Rule and ensure insight into evidence of the total amount of money which were granted to a plaintiff with adequate instruction of deduction this sum of money from received compensation. These types of the statute are currently common in a medical malpractice context. The main objective of this law is depletion recoverable damages by the tort victims from health service by the tort victims received compensation from collateral source. The result of this operation is avoiding a double recovery[1].

The interpretation of this rule

Each of the states of America can interpret this definition in various ways. In Wisconsin, the Collateral Source Rule consists that the plaintiff received compensation from other sources but not from wrongdoer so feature other sources of compensation is unacceptable. The Wisconsin Collateral Source Rule is practiced in[2]:

  • accidents and health insurance
  • medical payments from Mutual Benefit Association
  • sick leaves
  • unemployment compensation
  • payments for medical care

The arguments against modification of Collateral Source Rule[3].

  • The first argument - in which a wrongdoer should not obtain benefits of windfall. Those benefits should get a plaintiff.
  • The second argument - in which producers should not have permission to reveal costs of injury which was caused by its products. It is largely that a plaintiff is a prudential person so insurance has been purchased.

The possibilities of Collateral Source Rule

There are several possibilities like a[4]:

  1. provide reducing of compensation where the plaintiff gains benefits from the other source
  2. admit a tortfeasor to insight into evidence of damage which is related with a plaintiff who got a benefit from the collateral source
  3. modify the Collateral Source Rule not only a level of responsibility of producer amicably with liability in tort.

The Collateral Source Rule is a crucial element of American Law. Nowadays, the issue of indemnity is important because of plenty of accidents. In many cases costs of hospitality and rehabilitation are enormous. Surely, this system has advantages and disadvantages but in the future it certain that it will be improved to help millions of people. However, it obvious that this process will be equitable without any encroaching laws and values.



  1. Lawrence H T.(2000), p.56,57
  2. Dyke D.(1978), p.2
  3. Dyke D.(1978), p.3
  4. Dyke D.(1978), p.3,4

Author: Tomasz Kuś