If you have sustained injuries in an automobile accident, at your workplace, at a public place, or any other place other than your home, you might have the option of filing a personal injury claim or lawsuit to seek compensation. In both scenarios and depending on the specifics of your case, you may qualify to receive economic and non-economic damages. For someone who has never been involved in a personal injury case, it’s fair to wonder how both are different.
So, what is the difference between economic damages and non-economic damages, how do punitive damages work, and how do you go about filing a claim/lawsuit?
Damages in Personal Injury Lawsuits
Damages in personal injury lawsuits refer to the monetary compensation plaintiffs receive for the injuries they suffer owing to negligence or willful wrongdoing on the part of the defendants. It’s also common to refer to the injuries and losses a plaintiff suffers as damages. Plaintiffs commonly seek damages for physical and mental harm, as well as damage to property. In other words, damages include tangible as well as intangible losses.
The main reason courts award compensatory damages is to provide monetary relief to a plaintiff to try and restore his/her/their position to as it was before the accident, to the maximum extent possible. In addition, damages can also serve as punishments and deterrents to dissuade defendants and others from repeating the same or similar actions.
The most commonly sought damages include economic and non-economic damages, although some cases qualify for punitive damages too. The onus of establishing the defendant’s fault in each case rests on the plaintiff.
If you look at the non-economic damages vs. economic damages comparison, you’ll see that economic damages are fairly easy to prove because most of what you need to do is provide documentary evidence that supports your case. However, the going might not be as easy if you seek non-economic or punitive damages.
What Are Economic Damages in a Personal Injury Case?
Economic damages refer to the quantifiable losses that a plaintiff suffers because of someone else’s negligence or actions. In this case, you stand to receive compensation for your financial losses as well as the financial impact of the accident.
What Are Examples of Economic Damages?
Economic damages in personal injury cases come in the form of:
- Medical expenses
- Lost wages
- Loss of capacity to earn
- Loss of employment
- Loss of employment/business opportunities
- Property damage
- Burial expenses
- Other out-of-pocket expenses related to your injuries/accident
How to Calculate Economic Damages?
While putting a figure on economic damages in a personal injury case might seem straightforward, know that it requires analyzing evidence, expert testimony, treatment-related documentation, and financial records very closely. It’s common for personal injury attorneys and lawyers to use different methods to calculate economic damages accurately.
- Income. The income method is ideal for determining damages based on lost wages, reduced capacity to earn, or loss of capacity to earn. It takes into account aspects like pre-injury earnings, potential to earn, education, employment history, and projected career graph. This helps put a number to the lost income and benefits through the course of a plaintiff’s existence.
- Cost. This method looks at the expenses a plaintiff incurs because of injuries that result from an accident. It requires totaling all associated costs like ambulance services, hospitalization, surgery, prescription medicine, medical devices, therapy, rehabilitation, and damage to property.
- Marketplace. The marketplace approach requires arriving at a fair market value (FMV) of the damaged/destroyed property resulting from an accident. This includes personal belongings, automobiles, and real estate. This step typically involves relying on expert opinions, appraisals, and market data.
How Non-Economic Damages Work
Non-economic damages refer to the intangible harm and losses a plaintiff suffers, which are not easy to measure monetarily. These typically cover the subjective impact of injuries on a plaintiff’s life as opposed to obvious financial losses.
What Are Examples of Non-Economic Damages?
Common non-economic damage examples include:
- Pain and suffering
- Emotional distress
- Mental anguish/trauma
- Scarring/disfigurement
- Loss of enjoyment of life
- Loss of companionship
- Loss of consortium
- Damage to reputation
How to Calculate Non-Economic Damages?
Given that non-economic damages tend to come with no real objective criteria, calculating them can present different challenges. Not surprisingly, personal injury attorneys and lawyers tend to partner with other professionals like medical experts, accident reconstruction specialists, and economic experts to assess their clients’ non-economic damages. The three main factors that play a role in quantifying non-economic damages include:
- Severity of harm. This extends beyond the severity of physical injuries, and also includes the emotional and psychological damages that a plaintiff might suffer. Factors taken into account include the severity of injuries, intensity of pain/suffering, and long-term effects.
- Length of anguish/distress/suffering. This refers to the duration that a plaintiff goes through pain, suffering, emotional distress, and discomfort because of the injuries. Personal injury attorneys typically rely on medical and financial experts to work in tandem to quantify damages by accounting for existing medical treatment, long-term prognosis, and expected recovery period.
- Short- and long-term impact. Assessing the impact of injuries on a plaintiff’s day-to-day life requires looking at how they affect his/her/their ability to carry out everyday tasks, socialize, and find joy in life. Psychologists often work with other medical professionals and financial experts and assess aspects like the changes in lifestyle and functional capacity to determine the dollar value of a plaintiff’s damages.
Personal injury attorneys use two methods to calculate non-economic damages. These include the per diem and multiplier methods.
- Per diem. Using this method, your attorney will arrive at a specific dollar amount for each day and then multiply it by the number of days it will take for you to recover from your injuries.
- Multiplier. More commonly used than the per diem method, this method requires multiplying the economic damages by a factor that typically varies from 1.5 to 5. The severity of the injuries a plaintiff suffers tends to have a bearing on this number, with more serious cases benefiting from higher multipliers.
What About Punitive Damages?
Courts award punitive damages with the intention to punish defendants and deter them and others in society from repeating the same action or conduct. If you wish to seek punitive damages, you need to prove that a defendant’s egregious or intentional actions were the cause of your injuries. Punitive damages typically accompany economic and non-economic damages. However, while a court may grant you economic and non-economic damages, it might deny your claim for punitive damages.
How to Claim Damages?
No matter what type of accident you meet with, you should partner with an attorney who will go through the facts of your case and the damages you suffer to determine how much money to seek as compensation. Often, insurance companies try to negotiate settlements with accident victims directly, but it’s in your best interest to avoid taking this path. This is because initial settlement amounts offered are usually not enough to cover the damages in question.
With an attorney by your side, you can count on his/her/their expertise and experience to negotiate with the other party’s insurance company and attorneys, which increases the likelihood of getting the compensation you seek. Given that most personal injury cases end up in settlements, you can do with all the expert help you get at the negotiation table. Besides, if both parties fail to reach a desirable settlement, your attorney can file a personal injury lawsuit in court.
Conclusion
Now that you know what the difference between economic damages and non-economic damages is, keep in mind that both might apply in your case if you’ve suffered injuries because of someone else. Depending on the intention of the other party, you may qualify to receive punitive damages as well. To be sure, consider getting in touch with a personal injury attorney who can tell you where your case stands and guide you accordingly.