The Law Protects the Prudent: The Collateral Source Doctrine

The Collateral Source Doctrine is an important legal protection for people and is a useful doctrine to know about when dealing with the insurance companies who represent defendants in personal injury lawsuits. Collateral Source Doctrine sounds like a very complicated legal doctrine, but the idea is actually quite simple.

Insurance Company Cannot Benefit from Plaintiff’s Insurance

The best way to explain this legal protection is to give an example. Let’s say Bobby, a 35 year old husband and father, takes out a disability policy to protect him and his family from loss of wages if he is injured. Unfortunately, Bobby is severely injured by an 18 wheel truck.

Bobby’s attorney files a lawsuit against the negligent trucking company for medical bills, pain and suffering and loss of wages. The defendant’s insurance company wants the jury to know that Bobby will be receiving disability payments for the rest of his life as the result of his disability policy.

Information about Plaintiff’s Insurance is Not Admissible

Their goal in sharing this information is to reduce the jury’s sympathy for Bobby and reduce his wage loss award. The insurance company argues that Bobby will be double dipping and in a sense, he is.  However, this information will not be admissible — the judge will invoke the Collateral Source Doctrine and the jury will never be allowed to know about the additional money.

The reason the jury will not be told of the disability payments is that the victim should not be punished for being prudent. Bobby bought and made payments on the disability policy, not the trucking company, so why should the negligent defendant benefit by Bobby’s virtue and foresight?  So in this scenario, if the jury awards Bobby wage loss, he will also get disability payments.