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The origins of the collateral source rule can be traced to a decision by the United States Supreme Court in 1854, The Propeller Monticello v. Mollison, 58 U.S. (17 How.) 152, 15 L. Ed. 68 (1854). This case arose from a shipwreck involving a steamship, The Propeller Monticello, and a schooner ship named the Northwestern. Both ships carried cargo, and the schooner, which sank, was insured. The schooner's insurer paid for the loss of the schooner and its cargo prior to the filing of the suit, which was initiated by the schooner's owner. As a defense, the steamship's owner argued that the insurance pay-off released it from liability. The Supreme Court disagreed, and held instead that the schooner's 'contract with the insurer is in the nature of a wager between third parties, with which the trespasser has no concern. The insurer does not stand in the relation of a joint trespasser, so that satisfaction accepted from him shall be a release of others.' Id. at 155. Further, the Supreme Court concluded that the tortfeasor 'is bound to make satisfaction for the injury he has done.' Id.


Under the collateral source rule, the amount of damages ...

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