Connecticut has a law that controls how compensation from external sources impacts a plaintiff’s recovery of damages in a personal injury case. Known as the collateral source rule, its purpose is to prevent plaintiffs from receiving double recovery for the same injury, where more than one insurer is liable for paying out benefits.
In its traditional form, the collateral source rule allowed personal injury plaintiffs to recover the full amount of damages awarded by a court or agreed to in a settlement, regardless of whether the plaintiff had already received compensation for medical expenses or lost wages from other sources such as health insurance, workers' compensation or disability benefits. The rationale behind this rule was that defendants should not benefit from payments plaintiffs received from insurance policies they paid for.
However, in 1986, the Connecticut legislature modified the rule. Under Connecticut General Statutes § 52-225a, once a verdict is reached, the court is required to reduce the plaintiff’s award by the amount of compensation they have received from collateral sources. These include health insurance, disability insurance and other private coverage, such as personal injury protection (PIP) from the plaintiff’s own auto insurance policy. They also include workers’ compensation benefits for accidents occurring on the job, and public health insurance benefits like Medicaid and Medicare.
Connecticut’s modified collateral source rule puts specific strictures on how the reduction of an award is applied. In personal injury trials, evidence of collateral source payments (such as insurance benefits) is inadmissible before the jury. This preserves the jury’s focus on determining the full extent of damages based on the facts of the case, without being influenced by the existence of external compensation.
After the jury renders a verdict, the court adjusts the award to subtract the amount of any collateral source benefits the plaintiff has received. However, there are two important exceptions:
Insurance Premium Payments — The court will not reduce the award by amounts that the plaintiff or their family paid toward securing the insurance that was the collateral source.
Right of Subrogation — If an insurance company has a right to reimbursement or subrogation from the plaintiff's award, the court does not deduct that amount. This is so that the plaintiff does not bear the burden of repaying the insurance company out of a reduced award.
The collateral source rule often affects settlement negotiations. Defendants, knowing that a court will adjust for collateral sources after a trial, may use this as leverage to reduce settlement offers. Plaintiffs, on the other hand, may argue that the full value of the damages should still be considered since not all collateral sources may be recoverable by the defendant (for instance, because of subrogation rights or because the plaintiff paid for the coverage). An experienced Connecticut personal injury attorney knows how to substantiate damages and structure settlement demands to achieve an optimal result.
Gesmonde, Pietrosimone & Sgrignari, L.L.C. in Hamden and East Haven represents Connecticut residents who have been injured in accidents caused by other people’s negligence. Please call 203-745-0942 or contact us online to set up a meeting with one of our attorneys.
Gesmonde, Pietrosimone & Sgrignari, L.L.C. is located in Hamden, CT and serves clients in and around North Haven, Hamden, Waterbury, Bethany, Milford, Wallingford, Prospect, Woodbridge, Northford, Madison, Beacon Falls, Branford, Cheshire, North Branford, East Haven, Naugatuck, Meriden, Ansonia and New Haven County.
Attorney Advertising. This website is designed for general information only. The information presented at
this site should not be construed to be formal legal advice nor the formation of a lawyer/client
relationship.
[ Site Map ]