What is the Collateral Source Rule?

The collateral source rule is a common law rule that has been applied to personal injury cases to prevent a defendant, also known as a tortfeasor, from introducing evidence to a jury of collateral source payments (such as health insurance) that could reduce the defendant’s liability to an injured party. Its purpose was to hold the defendant liable for the entirety of his or her negligent behavior, rather than benefiting from a collateral source.
Does the Collateral Source Rule Still Exist in Missouri & Kansas?

Within the past few years, the collateral source rule has become a thing of the past, which has worked to reduce a plaintiff’s potential recovery if the plaintiff had the benefit of health insurance. The collateral source has been referred to as a windfall for the plaintiff. Unfortunately, the move away from the collateral source rule seems to have become a windfall for the defendant. In reality, the ones that are really benefitting are the big insurance companies.

The collateral source rule still exists but in a much more limited capacity. Now it only prevents defendants from introducing the source of the collateral payment. For example, a defendant can introduce evidence that out of $15,000 in medical expenses, only $5,000 was paid and the other $10,000 was adjusted or written off. The defendant, however, cannot introduce evidence of whether the plaintiff’s medical expenses were paid by private health insurance, Medicaid, or Medicaid.

Read The Full Story

Share this: