Collateral Sources in Colorado
At common law, compensation paid to the injured person from a collateral source, independent of the tortfeasor, did not reduce the damages owed by the tortfeasor.
Now, by statute (C.R.S. 13-21-111.6), the trial court will reduce the verdict by the amount of collateral sources - except that the verdict cannot be reduced by compensation paid to the plaintiff as a result of a contract entered into and paid by or on behalf of the plaintiff. Quite often this "contract exception" swallows up the general rule of the statute, as shown in the cases below.
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