Collateral Income Source Rule
One area that seems, at least on the surface, to run counter to economic thinking is in the area of independent or third party income sources. Workers compensation payments that an injured worker may receive is an example of collateral source income. To an economist at first glance, it may appear that any income received from workers compensation or the like should be subtracted from the plaintiff's lost earnings calculation.
In contrast many courts, citing the collateral source rule, do not subtract this income from any damage award. The justification for this rule appears to be that the wrongdoer should not benefit from the expenditures made by the injured party and relationships that may have existed between the injured party and third persons before the incident.
The collateral rule suggest that the economist should view the income from a workers compensation policy like income earned from an investment, for example a annuity or stock dividend, made prior to the incident. Furthermore, if the issue is damage to the individual's labor market earnings capacity then workers compensation and similar types of income are by definition not labor market earnings.
Hoey & Farina, P.C, a Chicago Illinois law firm, had a very clear discussion of this point:
'Under the collateral source rule, benefits received by the injured party from a source wholly independent of, and collateral to, the tortfeasor will not diminish damages otherwise recoverable from the tortfeasor.
" 'A situation in which the collateral source rule is frequently applied is one in which the injured plaintiff has been partly or wholly indemnify for the loss by proceeds from his accident insurance. In such a situation, the damages recovered by the plaintiff from the tortfeasor are not decreased by the amounts received from insurance proceeds. The justification for this rule is that the wrongdoer should not benefit from the expenditures made by the injured party or take advantage of contracts or other relations that may exist between the injured party and third persons.'
See the following for a good example of a case that uses and discusses the collateral source rule:
http://www.felahfd.com/HFDLaw/notebook/377.htm
In contrast many courts, citing the collateral source rule, do not subtract this income from any damage award. The justification for this rule appears to be that the wrongdoer should not benefit from the expenditures made by the injured party and relationships that may have existed between the injured party and third persons before the incident.
The collateral rule suggest that the economist should view the income from a workers compensation policy like income earned from an investment, for example a annuity or stock dividend, made prior to the incident. Furthermore, if the issue is damage to the individual's labor market earnings capacity then workers compensation and similar types of income are by definition not labor market earnings.
Hoey & Farina, P.C, a Chicago Illinois law firm, had a very clear discussion of this point:
'Under the collateral source rule, benefits received by the injured party from a source wholly independent of, and collateral to, the tortfeasor will not diminish damages otherwise recoverable from the tortfeasor.
" 'A situation in which the collateral source rule is frequently applied is one in which the injured plaintiff has been partly or wholly indemnify for the loss by proceeds from his accident insurance. In such a situation, the damages recovered by the plaintiff from the tortfeasor are not decreased by the amounts received from insurance proceeds. The justification for this rule is that the wrongdoer should not benefit from the expenditures made by the injured party or take advantage of contracts or other relations that may exist between the injured party and third persons.'
See the following for a good example of a case that uses and discusses the collateral source rule:
http://www.felahfd.com/HFDLaw/notebook/377.htm
posted by The Experts @ 11:54 AM
0 Comments:
Post a Comment
Links to this post:
Create a Link
<< Home