Collateral-Benefit Rule Law and Legal Definition

Collateral-Benefit Rule is a principle of tort law that if an injured party receives compensation for the injuries from a source different from the wrong doer, the payment should not be deducted from the damages that the wrongdoer must pay. Under this rule, payment which a plaintiff receives for his or her loss from another source is not credited against the defendant's liability for all damages resulting from its wrongful or negligent act.

Collateral-benefit rule is also known as collateral-source rule.

The following is a caselaw on the rule:

The collateral source or collateral benefits rule provides that payments made to or benefits conferred on the injured party from other sources are not credited against the tortfeasor's liability, although they cover all or a part of the harm for which the tortfeasor is liable. [Air Crash Disaster near Chi. v. McDonnell Douglas Corp., 803 F.2d 304 (7th Cir. Ill. 1986)]