How Does Illinois’s Collateral Source Rule Work?
If you have been injured in an accident due to someone else’s negligent actions, your own insurance company will often handle your medical expenses before you press charges. In many states, this could be brought against you in the course of a lawsuit. The defendant (i.e. those who were at fault) can try to use the fact that you’d already received compensation to reduce or eliminate their responsibility to pay damages.
Illinois, however, has a collateral source rule that prevents this from happening. In essence, the rule dictates that the defendant cannot submit evidence that you received compensation from a collateral source (such as your insurance company). There are a few reasons why this is beneficial to you, but it can also result in some challenges in recovering damages as well.
Holding Negligent Parties Accountable
The main purpose of the collateral source rule is it ensures that those who caused your injury are held responsible for it. If they were able to prove that your insurance company had paid your medical bills, they could diminish their liability or avoid it altogether by claiming that you’d already been compensated.
This would work against you since it could limit the compensation you’d receive for medical expenses. It also keeps allows the offending party to avoid their responsibility to pay for the damage they caused.
Under Illinois law, however, evidence showing you received compensation from a collateral source cannot be admitted. This means the defendant cannot evade their liability, a fact which also serves as a deterrent toward others.
The Myth of Double Compensation
Some criticize the collateral source rule by claiming that plaintiffs receive double compensation. After all, if your insurance company paid for your medical bills after a slip and fall accident, and you then recovered damages for those same expenses in court, then you would be compensated for twice the amount that your medical care cost you.
However, it doesn’t quite work that way. In many cases, an insurance company won’t cover the entire amount, resulting in some out-of-pocket expense on your part. In addition, court and attorney fees will often eat into the actual amount you receive as well, so you never actually receive double compensation at all.
Subrogation and Other Complications
One area where Illinois’s collateral source rule could be limited is in the case of subrogation. Subrogation is when another party (in this case, your insurance company) takes your place as the plaintiff in order to recover the amounts they paid out to you.
This becomes problematic because it can prevent you from pursuing your own claims against the negligent party. Instead of recovering damages for pain and suffering, property damage, lost earning capacity, and so forth, you are limited only to the amounts provided through your insurance company for your medical care.
There are also other stipulations built into Illinois law that could be used by the defendant to seek post-judgment action against you. In these cases, it’s important to have an experienced attorney on your side who is familiar with the law and the protections in place. Hart David Carson LLP can provide you with that legal guidance, so contact us today.