Understanding the Collateral Source Rule - Info from a Chesapeake Personal Injury Lawyer

If you or a loved one was injured in an accident, there is an important legal principle you need to be aware of known as the collateral source rule. The rule has been used in tort cases in Virginia for more than a century. Basically, it means that compensation you receive from a third party (e.g., social security, disability payments, pension income, etc.) other than the defendant cannot be used against you when pursuing damages through a personal injury claim.

Example of the Collateral Source Rule

Let’s say a motorist ran a red light and crashed into you on Battlefield Boulevard in Chesapeake. You break your right arm and injure your back to the point that you need surgery. Your medical bills total $100,000 and you must take six months off work. Your medical insurance covers the bills except for deductibles. You use your accrued vacation time from work and receive disability payments.

Your insurance and work benefits helped offset some of the damages. Can the auto insurance company try to point to those benefits and argue that you should receive less damages than you are claiming? No. According to the collateral source rule, these collateral sources of income are not germane to your personal injury claim. Therefore, they are inadmissible in court to try and hinder your case.

What the Law Says

According to the Virginia Supreme Court:

The collateral source rule is designed to strike a balance between two competing principles of tort law: (1) a plaintiff is entitled to compensation sufficient to make him whole, but no more; and (2) a defendant is liable for all damages that proximately result from his wrong. A plaintiff who receives a double recovery for a single tort enjoys a windfall; a defendant who escapes, in whole or in part, liability for his wrong enjoys a windfall. Because the law must sanction one windfall and deny the other, it favors the victim of the wrong rather than the wrongdoer.

This basically means that both sides cannot win in a tort law case. Both parties cannot enjoy a windfall, so the law sides with the victim. Therefore, the victim is entitled to receive compensation from the defendant as well as compensation from collateral sources.

Talk to an Experienced Car Accident Lawyer in Chesapeake Today

If you or a loved one was seriously harmed in an accident, you need to have an experienced attorney on your side to make sure a defense attorney does not try to pull an endrun around the collateral source rule. Believe me, insurance companies will use every dirty trick in the book to reduce or deny a claim. You need to level the playing field and have an experienced personal injury lawyer on your side. 

Richard N. Shapiro
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Personal Injury & Wrongful Death Lawyer Serving Va Beach, Norfolk, Chesapeake & all of Virginia