A paralegal is researching a client's claim for damages after a construction company's negligence caused significant water damage to their home. The client's insurance policy covers some of the damages, but not all. The attorney explains that the client can typically only recover damages from the construction company for losses not covered by insurance due to a legal principle preventing double recovery. What is this principle called?
- ASubrogation
- BCollateral source rule
- CRes ipsa loquitur
- DContribution
Show answer & explanationAnswer & explanation
Correct answer: B. Collateral source rule
The collateral source rule generally prevents evidence that a plaintiff has received compensation for the injury from a source independent of the tortfeasor (like insurance) from being introduced to reduce the damages owed by the defendant. However, the question describes the *effect* of preventing double recovery, which is the underlying policy reason for the rule in many jurisdictions, sometimes leading to adjustments or exceptions.
Why the other options are wrong
- A. Subrogation is when an insurer steps into the shoes of the insured to sue the at-fault party.
- C. Res ipsa loquitur is a doctrine used to infer negligence when the event speaks for itself.
- D. Contribution allows one tortfeasor to recover from another for their share of liability.
Collateral Source Rule
A legal doctrine that prevents an injured party's damages from being reduced by payments received from sources independent of the tortfeasor (e.g., insurance, sick leave, gratuitous medical care). While the rule itself allows recovery from both, many jurisdictions have modified it to prevent double recovery, often through subrogation or statutory offsets.
- Prevents the defendant from benefiting from the plaintiff's prudence (e.g., buying insurance).
- Can result in plaintiff receiving more than actual loss in some pure collateral source jurisdictions.
- Many states have modified or abolished it to avoid double recovery, often through subrogation or statutory offsets.
- The question focuses on the policy of preventing double recovery, which is often addressed through modifications of this rule.
Memory trick: Collateral Sources Can't Cut Compensation.