In New York personal injury and medical malpractice litigation, injured victims are entitled to ask a jury to award various items of damages (i.e., compensation), including, but not limited to, pain and suffering, lost wages and employment benefits, and medical expenses. A jury may award compensation for “past” and “future” losses; the “past” losses are calculated from the date of the injury through the date of the jury’s verdict, and “future” losses are calculated from the date of the jury’s verdict through a date in the future selected by the jury based upon the evidence presented at trial as to how long the injured plaintiff (a “plaintiff” is the person who has been injured and who brings the lawsuit) is likely to continue experiencing the loss. With respect to lost wages, lost employment benefits and medical expenses, however, “collateral sources” such as health insurance and disability insurance are often available to an injured plaintiff to pay for things like medical expenses or to replace lost wages incurred as a result of a disability from working. In many cases, the injured plaintiff would be entitled to receive these benefits in the event of a serious disability whether or not he or she ever brought a lawsuit.
In New York personal injury lawsuits in which an injured plaintiff is awarded compensation for medical expenses or lost earnings (e.g., wages and social security benefits) or lost employee benefits (e.g., entitlement to medical insurance, pension benefits), the “collateral source rule”, codified in N.Y. C.P.L.R. Section 4545, may reduce the amount of compensation that can actually be collected from a judgment where a defendant can prove that the plaintiff’s losses are almost certain to be replaced by “collateral source” payments, and that the plaintiff will not experience any true “out of pocket” loss. Though, in practice, the application of this rule is very complex (often involving additional hearings after the conclusion of the trial), the purpose of this article is to give injured accident victims a very basic, lay-person-level understanding of how this important rule may apply to their New York personal injury or medical malpractice case.