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Collateral Source Rule

The collateral source rule is a basic principle of common law that has evolved over the centuries. Generally speaking, the collateral source rule says that if an injured person receives compensation from a source other than the tortfeasor, then the damages owed by the tortfeasor should not be reduced by the amount of that compensation.

This simple example may make the collateral source rule more clear:

John A. has a private disability insurance policy in addition to his other insurance policies. John is struck by a drunk driver and suffers paralyzing injuries. As a victim of negligence, John is entitled to claim compensation from the drunk driver for his medical costs, lost income, pain and suffering, and other economic and noneconomic losses. John is also entitled to compensation from his private disability policy.

The collateral source rule says that the damages the drunk driver owes John cannot be reduced by the amount of compensation John gets from his disability claim or any other source.

Exceptions To The Collateral Source Rule

Massachusetts has altered the collateral source rule by statute and through case law. The rule still holds, but with one major exception: Compensation owed by a tortfeasor can be reduced by the amount of compensation an injured person receives from his or her personal injury protection (PIP) insurance.

There are numerous other aspects of the rule that are too complex to discuss here. Because the collateral source rule and its application is so complicated, insurance defense attorneys may attempt to mislead jurors, seeking to reduce the amount of damages in a personal injury or car accident case. Though an alert judge may catch this and properly instruct the jury, that is by no means guaranteed.

The important thing to remember is this: To protect your rights and interests in a personal injury case, you need strong and effective legal representation.

Experienced Attorneys Who Understand The Collateral Source Rule

Dane Shulman Associates, LLC, is a team of trial lawyers with decades of experience in the courts of Massachusetts. We understand the collateral source rule and how to maximize the compensation our clients receive. When we represent you, we will work diligently to obtain the best possible jury award or settlement for you.

Free Consultation — Contact An Attorney

To learn more about the collateral source rule and how it could affect your personal injury case, call Dane Shulman Associates, LLC, at (617) 298-2500 or contact us online.

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