Collateral source rule

Collateral Source Rule - 


 * The collateral source rule is a general legal provision that offsets from damages awarded in tort actions should not be taken because expenses have been paid by a third party who was not responsible for an individual’s injury. In a wrongful death action, for example, the amount won in a tort action from the defendant who caused the death will not be reduced by the amount paid out to the surviving spouse by private life insurance. Amounts paid in the form of disability insurance or disability programs through Social Security typically cannot be subtracted from amounts won in tort actions for lost income, and so forth. The term “collateral source rule” should be used carefully. Many states create exceptions to the general rule that offsets cannot be taken, particularly in medical malpractice cases. Thus, what may be called the collateral source rule in a given state may have important exceptions to the general rule described here. Exceptions are particularly important in New York and California.


 * From: http://www.umsl.edu/divisions/artscience/economics/ForensicEconomics/definitions.html