What is the “Collateral Source Rule” in New York Personal Injury Law?

The collateral source rule in a New York personal injury case means the plaintiff cannot receive compensation for items covered by other sources, such as health or disability insurance. In other words, the plaintiff cannot accept payment twice for the same expense. The collateral source rule is fair, but the medical and benefit billing system is complex.

A New York City personal injury lawyer at Douglas and London not only protects your rights but keeps you abreast of all developments in your case and makes sure every aspect is clear. If the collateral source rule applies to your personal injury lawsuit, we will let you know.

Collateral Source Circumstances

Usually, the collateral source rule applies after a jury trial. Damages for medical expenses, lost wages, and employee benefits are awarded. Under the collateral source rule, the defendant is given a short time to request a hearing from the court. At that hearing, the defendant must provide evidence that the plaintiff has collateral sources paying for these benefits.

For example, if the plaintiff was awarded $10,000 in medical expenses, but the defendant can prove that health insurance or another source paid $8,000 of this amount, the medical expenses award is reduced to $2,000. However, any real out-of-pocket medical expenses, such as transportation to and from a healthcare provider’s office, remains part of your damage award. 

Moreover, if the plaintiff’s health insurer paid all of the medical bills, it is possible for the jury to award what the plaintiff paid in insurance premiums for two years before the verdict. Also included are the estimated costs of health insurance benefit maintenance. That is because this health insurance pays for future medical bills related to the claim and thus offsets plaintiff damages.  

Not all collateral sources of benefits are counted. Exceptions are made for life insurance and Medicare. However, part of the complexity surrounding the collateral insurance rule involves Medicare demanding repayment from the individual after paying for the claim.  This can take time and effort to resolve.

Lost Wages

Injuries often mean considerable time lost from work. The award may have included lost wages. The defendant may request a reduction in this category of the award based on the amount of lost wages paid by the plaintiff’s insurance company.

Collateral Source Examples

In addition to private health insurance, examples of potential collateral sources include:

  • Workers’ compensation
  • Medicaid
  • Social Security
  • Other federal or state assistance programs

If the plaintiff was able to receive these benefits, whether or not a lawsuit went forward, they are likely examples of collateral sources.

Reasonable Certainty

The defendant must reach the standard of “reasonable certainty” with their documentation to show the plaintiff has these collateral sources for reimbursement. That standard of proof is relatively high. It is the defendant’s burden to prove they exist and are sufficient for paying the defendant’s expenses.

If there are discrepancies in the evidence, such as a bill that was not covered by insurance and listed as paid by an alternative source, your attorney will address this.

Contact us for a free consultation

Personal injuries occur in many different ways, but they all have something in common. They resulted from another party’s negligence or recklessness. If this has happened to you, contact an experienced personal injury lawyer at Douglas and London.

We offer free consultations where we will review your claim and advise you of your options. Call or text us 24/7 or complete our online form to schedule an appointment.

Our clients have recovered more than $18 billion in verdicts and settlements due to the diligent work of our dedicated attorneys. You will only pay a fee if you receive compensation.