Collateral Source Rule

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 What is a Personal Injury Claim?

In claims for personal injury, plaintiff’s claim that they have sustained an injury or injuries as a result of an act or a failure to act on the part of a defendant. An injury may be:

  • Physical;
  • Mental; or
  • Both.

In these types of cases, a court may award a plaintiff money damages for personal injury. Examples of physical injuries a plaintiff may sustain include injuries to:

  • Organs;
  • Limbs; and/or
  • Other parts of the body.

Examples of mental health injuries may include emotional anguish and/or pain which was caused by the accident. The plaintiff’s injury does not have to manifest immediately and may develop over time.

In some cases, personal injuries occur as a result of an intentional act of the defendant, for example if they deliberately cause an injury or they intend to commit an act which results in injury. Personal injuries may also occur unintentionally.

If the plaintiff’s injury is the result of another individual’s negligence, they may file a lawsuit based on that negligent conduct.

Common examples of negligence cases include, but are not limited to:

What Are Personal Injury Accidents?

Personal injury accidents occur when individuals suffer some form of harm or injury because of another individual’s carelessness or disregard. Following an accident, an injured individual may be able to file a personal injury claim against the responsible party.

The plaintiff may use this civil court proceeding to collect compensatory damages, or money damages, for their injuries. It is important to be aware that personal injury law is distinct from criminal law.

A personal injury lawsuit is filed by an injured individual, or plaintiff, in a civil court. In some cases, a criminal action may be filed separately if the incident that led to the injury was criminal in nature.

Personal injury actions can fall into one of three categories, including:

Each of these categories has unique elements which must be shown in order for a plaintiff to prevail in their case. Personal injury cases may arise from many different types of events.
Personal injury attorneys assist individuals who have suffered injuries to obtain compensation for those injuries from the party who caused the injuries. Personal injury law, however, is more complex than that.

What are Compensatory Damages in a Personal Injury Claim?

The losses in a personal injury claim typically arise from some type of accident. If an injured individual files a claim or a lawsuit, they will most likely be requesting a form of financial compensation from the party that is responsible for causing the accident.

These damages are called compensatory damages because they are awarded in order to compensate the plaintiff for the injuries which they suffered. The purpose of these damages is to restore the plaintiff to the position they were in prior to the harm or loss occurring.

In general, there are two main categories of compensatory damages awards, including special damages and general damages. Special damages are used to restore the injured party to the position they were in prior to the injury occurring.

Special damages include damages which can be calculated, including:

  • Medical expenses;
  • Property damage;
  • Loss of wages or earnings; and
  • Other quantifiable losses.

General damages may be awarded for losses which are not easily calculated, including:

The laws of each state vary regarding compensatory damages. In some states, there are limits on the amount of compensatory damages, especially general damages.

What Types of Claims Receive Compensatory Damages?

Compensatory damages can be awarded in numerous different types of personal injury cases. Common types of cases where compensatory damages are awarded include, but are not limited to:

  • Car accident claims;
  • Slip and fall cases;
  • Medical malpractice and other forms of malpractice;
  • Assault, battery, and other types of torts;
  • Dog bite cases as well as other types of animal attack claims; and
  • Injuries caused by defective or dangerous products.

What is a Collateral Source?

A collateral source is another way in which an individual may be able to receive compensation for their injuries independent of the liability of the individual who caused the injury. A collateral source is usually an insurance benefit that arises from a health insurance policy.

For example, Tom may have been injured by Joe in an automobile accident. If Tom has medical insurance, the insurance company will usually pay for any medical or nursing costs which are associated with the automobile accident.

The compensation provided from Tom’s insurance company is independent from the liability Joe may face for causing the accident.

What Does the Collateral Source Rule Mean for My Personal Injury Recovery?

The majority of courts adhere to the collateral source rule. In general, an individual may recover compensation for their injuries from any party who created or caused the injury, even if they have an additional independent means of compensation.

Therefore, the injured individual’s recovery from the individual who caused the injury is not reduced as a result of any independent source of compensation. With the example above, Joe may be liable to Tom for $10,000, but Tom may receive $9,000 in compensation from their insurance company.

Pursuant to the collateral source rule, Tom can still sue Joe for the $10,000. Any award for Tom from Joe will not be discounted even though Tom already received $9,000 from his insurance company.

It is important to be aware, however, that if an injured individual is not precluded from suing the party who caused their injuries for the entire amount of their damages, the insurance company may be permitted to collect some of that award. There are many insurance policies which have clauses where, in these types of situations, the insurance company is permitted to take a portion of any award which is given to the injured individual equal to the amount that the insurance company paid them.

What is The Statute of Limitations for Personal Injury Claims?

There are statutes of limitations, or time limits, which apply to most legal claims. If the statute of limitations expires, the injured party may be barred from bringing a lawsuit to recover compensation for their injuries.

These laws are intended to preserve evidence as well as to reduce the likelihood of any false claims. It is important for a plaintiff to be aware of the statute of limitations in their case in order to prevent them from losing any potential compensation for their injuries.

The statutes of limitations for different types of personal injury claims may vary from state to state. Due to these issues and variations, it may be helpful for an individual to consult with an attorney to ensure they are able to recover compensation for their injuries.

Do I Need an Attorney?

If you have suffered an injury and your damages award is being discounted by insurance coverage you have or if your insurance company is attempting to collect a portion of your damages award, it is recommended that you consult with a personal injury attorney who has experience with insurance companies.

Your attorney will be able to advise you of the laws in your state, the applicable statute of limitations, and the compensation you may be eligible to keep. Having an attorney on your case will give you the best chance at obtaining the most damages to compensate you for your injuries.

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