IDEAS home Printed from https://ideas.repec.org/p/hcx/wpaper/0606.html
   My bibliography  Save this paper

The Collateral Source Rule: A Common Law Norm Under Special Interest Attack

Author

Listed:
  • David Schap

    () (Department of Economics, College of the Holy Cross)

  • Andrew Feeley

    (Department of Economics, College of the Holy Cross)

Abstract

According to Posnerian law and economics, common law (i.e., judge-made law) tends to promote efficiency. Public choice teaches that statutory (legislated) law need have no such efficiency property because, unlike appointed judges, legislators are subject to short election cycles and are beholden to special interests for election and re-election. The collateral source rule is a common law norm that permits an injured party to recover damages from both the tortfeasor (injurer) and from private insurance. Published work in the law and economics literature indicates that despite an appearance that the rule permits unwarranted double recover, the rule is indeed generally efficient. Despite its efficiency properties, the rule has been modified by statute in many jurisdictions in recent decades. Insurers reap transitory gains if exceptions to the collateral source rule are granted by statute whereas medical care providers achieve an ongoing gain if their sector is specifically excluded from the rule's application. The authors report the results of their exhaustive survey of statutory law concerning the collateral source rule in the fifty states, District of Columbia, Puerto Rico and Virgin Islands. The categorized findings reveal significant exceptions to the collateral source rule introduced into statutory law to the benefit of the special interests identified.

Suggested Citation

  • David Schap & Andrew Feeley, 2006. "The Collateral Source Rule: A Common Law Norm Under Special Interest Attack," Working Papers 0606, College of the Holy Cross, Department of Economics.
  • Handle: RePEc:hcx:wpaper:0606
    as

    Download full text from publisher

    File URL: http://www.cato.org/pubs/journal/cj28n1/cj28n1-6.pdf
    File Function: Originally presented at the Public Choice Society Meetings, New Orleans, LA, March 29, 2006
    Download Restriction: no

    References listed on IDEAS

    as
    1. David Schap & Andrew Feeley, 2006. "(Much) More on the Collateral Source Rule," Working Papers 0605, College of the Holy Cross, Department of Economics.
    2. Rubin, Paul H & Bailey, Martin J, 1994. "The Role of Lawyers in Changing the Law," The Journal of Legal Studies, University of Chicago Press, vol. 23(2), pages 807-831, June.
    3. Epstein, Richard A, 1988. "The Political Economy of Product Liability Reform," American Economic Review, American Economic Association, vol. 78(2), pages 311-315, May.
    4. Paul Rubin, 2005. "Public choice and tort reform," Public Choice, Springer, vol. 124(1), pages 223-236, July.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    forensic economics;

    JEL classification:

    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hcx:wpaper:0606. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Victor Matheson). General contact details of provider: http://edirc.repec.org/data/deholus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.