Personal Injury

Have you been injured in an Orange County accident? Is someone else to blame? If so, you may have the right to file a personal injury lawsuit against that person. The primary purpose of this lawsuit is to recover compensation from that person for your injuries.

When you file a lawsuit, you can be certain that the defendant (i.e., person you are blaming for your injury) will fight you every step of the way. Even if it is clear that they are at fault, they will search for ways to minimize the amount of money they have to pay. However, thanks to the collateral source rule, the defendant can’t point out that you’ve received compensation from someone else.

What is the Collateral Source Rule?

The collateral source rule is one of the oldest legal doctrines in the United States. In fact, the doctrine back to the 1805s. The collateral source rule helps to ensure that injured victims are able to recover all of the money they need after an accident.

The rule states that defendants may not introduce evidence that a victim has received compensation from a third party.

Why would a defendant try to introduce evidence showing that a victim has already received compensation from someone else? In theory, if a jury knew that a victim had already been compensated of his or her injuries, they would be less likely to order the defendant to pay, as well.

However, this would allow the defendant to escape liability for his or her actions. The collateral source rule essentially forces the defendant to be held accountable for causing a victim’s injuries.

Elements of the Collateral Source Rule

There are two primary components of the collateral source rule.

Evidence Of Payment Not Admissible: The collateral source rule prohibits a defendant from introducing into evidence proof that a victim has already been paid for his or her injuries. This includes evidence of reimbursement by an insurance company, workers compensation benefits, or social security disability benefits.

Victim’s Compensation Cannot Be Reduced: The collateral source rule prohibits a victim’s compensation from being reduced simply because he or she has already received payment from a third party.

Example: Sue is injured in an Orange County car accident. An investigation finds that another driver, John, is entirely at fault.  Sue decides to file a personal injury lawsuit against John to recover $200,000 in damages. John learns that Sue has received $25,000 from her insurance company. Even though he may want to introduce this evidence in court to reduce the damages he may be ordered to pay, the collateral source rule prohibits it.

Exceptions to the Collateral Source Rule

Over the years, California courts have carved out two notable exceptions to the collateral source rule. There are certain times when defendants may introduce evidence of payment from a third party.

Medical Malpractice Lawsuits

If you’ve been injured because of medical malpractice, a defendant (e.g., doctors, hospital, healthcare provider) has the right to offer evidence of compensation you have received from a third party. This mostly has to deal with payments made on your behalf by a health insurance provider. If a health insurance company pays any amount of your medical bill, your ability to recover economic damages will be significantly limited. If you do not have health insurance coverage, you will be more successful in recovering compensation from the defendant.

Reduction of Medical Fees

A defendant may also introduce evidence that you have been the recipient of reduced medical fees. Let’s say that a typical bill for medical fees in your case is $100,000. However, due to your financial situation, the hospital agrees to bill you $25,000. The defendant has the right to point out that your medical costs are $25,000, and not $100,000. As a result, the defendant would only be required to pay your reduced (and actual) costs.

Do you want to learn more about getting the money you deserve after an Orange County accident? Our personal injury attorneys are available to speak with you and help you understand your rights.  Call us today to schedule a free consultation.

Law Offices of John Rapillo