A rule of damages stating that benefits received by a plaintiff from a source wholly independent of and collateral to the wrongdoer do not diminish the damages the plaintiff can otherwise recover. Under the collateral source rule, evidence of a plaintiff's alternative or additional sources of payment for expenses or losses for which the plaintiff seeks damages in a civil action, such as insurance coverage, generally is excluded as irrelevant.

In employment discrimination cases, the collateral source rule allows a terminated employee to recover the full amount of damages against the defendant employer, even though the employee has received compensation for some or all of the same damages from a different or collateral source independent of the employer, such as unemployment insurance, workers' compensation, disability, or pension benefits.

Payments that qualify as collateral source payments generally are not deducted from back pay awards, and the court may preclude the employer from introducing evidence of those payments. Because front pay is an equitable remedy, the prevailing view is that the trial court has discretion to consider or deduct collateral source payments when awarding front pay.

For more information on back pay, see Practice Note, Remedies: Back Pay in Employment Discrimination Cases. For more information on front pay, see Practice Note, Remedies: Front Pay in Employment Discrimination Cases.

For more information on employment law remedies generally, see Remedies Under Major Federal Employment Anti-Discrimination Laws Chart and Employment Litigation Remedies Toolkit.