Tort Law Reform: Strict Liability and the Collateral Source Rule Do Not Mix

The imposition of strict liability and the simultaneous application of the collateral source rule to innocent defendants represent unfair and unsound public policy. Strict liability and the collateral source rule should not be mixed; nevertheless, our courts inadvertently blend them. A fundamental reform that would help stabilize the American tort law system is to abolish the collateral source rule in to whenever a claimant relies on a strict liability theory.The collateral source rule is appropriate only when a claimant proves that the defendant was at fault in causing an injury. There is a broad view in the United States that the American tort system has become unwieldly and too expensive.' Many blame the advent of strict liability theories.

Where American tort law went awry may be not so much in its adoption of strict liability when appropriate, but rather in converting from a fault-based system to a strict liability system without any adjustment of its dam-age rules. Under traditional tort law, an injured claimant may receive damages that are many times his actual out-of-pocket losses.For example, the claimant may receive damages for pain and suffering that are nine to ten times out-of-pocket costs plus double recovery for out-of-pocket costs because of the collateral source rule. On the other hand, when an individual suffers an insured loss for which no legal recourse is available, his "expectation" is to recover only actual out-of-pocket losses or maybe only a portion of them. If the courts had made appropriate adjustments in the tort damage rules when they spawned strict liability, our tort system would be far less wounded than it is today.