How The Collateral Source Rule Works For You



The collateral source rule in Maryland dates back to case law from 1899. Effectively, it allows a plaintiff to "double dip" or recover damages twice for some or all of their 'out of pocket' or economic losses.


The reasoning behind the public policy justification for the collateral source rule is dual purposed specifically (1) that the at fault party should not benefit from the plaintiff taking advantage of a contractually obligated entitlement from an independent source and (2) the rule also encourages the maintenance of insurance type benefits.


A plaintiff's PIP, health insurance, or any other collateral source is not introduced to the jury because of the jury may reduce the damages award when it discovers that the plaintiff's damages have been paid by another source.


In Maryland, the collateral source rule generally permits an injured person to recover the full amount of his or her provable damages, regardless of the amount of compensation which the person has received for his injuries from sources unrelated to the tortfeasor.


To the extent this results in a double-recovery for the plaintiff, the collateral source permits such a double-recovery. For example, if a plaintiff misses work due to an injury, but receives sick pay, the plaintiff may claim for lost wages even though the lost wages were covered by the sick pay. In so doing, the plaintiff recovers not only the sick pay, but also the "lost wages" as a result of the tortious injury. Notwithstanding, keep in mind that exceptions do apply including but not limited to subrogation rights that may be asserted by a plaintiff's health insurer which will require the plaintiff to reimburse their health insurer for actual amounts paid towards their medical bills.


For additional information on this topic or any other personal injury related matter, do not hesitate to contact us for a free consultation.