What is the "collateral source rule"?

The collateral source rule is indeed a legal principle that disallows a defendant in a personal injury case from using the fact that the plaintiff has received benefits from other sources to offset their liability. In other words, if a plaintiff is injured and receives compensation from a third party, such as insurance or government benefits, the defendant cannot argue that this compensation should reduce their financial responsibility in the lawsuit. This rule exists to ensure that plaintiffs receive full compensation for their injuries and that defendants do not benefit from the plaintiff's foresight in securing additional coverage.

This principle is significant in tort law as it aims to protect the injured party's ability to recover damages without being penalized for having other sources of compensation that may alleviate their financial burden. By preventing the reduction of damages based on other compensatory sources, the collateral source rule maintains the integrity of the civil justice system and underscores the responsibility of the wrongdoer to fully compensate the victim for their losses.