Collateral Source Rule Law and Legal Definition

Collateral source rule is a rule of damages that benefits received by the plaintiff from a source wholly independent of and collateral to the wrongdoer will not diminish the damages otherwise recoverable. Under the collateral source rule, any evidence of a plaintiff's alternative or additional sources of payment for expenses or losses for which damages are sought in a civil action, such as insurance coverage, is excluded as irrelevant. The collateral source rule provides that if an injured person receives compensation for his/her injuries from a source wholly independent of the tortfeasor, such payment should not be deducted from the damages that s/he would otherwise collect from the tortfeasor. The term injured person in the context of the collateral source rule connotes one who has sustained personal injuries or property damage at the hands of a tortfeasor. [Kirtland & Packard v. Superior Court, 59 Cal. App. 3d 140 (Cal. App. 2d Dist. 1976)]