The Survival of the Affordable Care Act and the Potential End of the Collateral Source Rule, An Unintended Tort Reform

Written by James J. Lofrese of Traub Lieberman Straus & Shrewsberry, LLP for the 2015 Fall/Winter issue of USLAW Magazine.

An inured plaintiff calls various experts to the witness stand who testify that he will need $5 million in future medical care. In reality, the plaintiff has health insurance and will pay, at most, a deductible and his premiums. Should the defendant still pay $5 million in damages? The Collateral Source Rule says he should.

The concept behind the Collateral Source Rule dates back to the 1800s with the proposition that a tortfeasor should not benefit from the “fortuitous existence of a collateral remedy.”1 Courts had to choose between granting a windfall to a defendant (who escapes liability to pay for some of the injuries he caused) or a plaintiff (who receives a double recovery). Courts chose to grant the windfall to plaintiffs, and the Collateral Source Rule was born….read more.