If you have ever read a news article about a large personal injury award, you may wonder how the jury (or judge) came up with that figure. While calculating damages is not an exact science, it is also not mere guesswork. The plaintiff in a personal injury case must present evidence, such as bills or expert testimony, to establish the size and scope of his or her losses attributable to the defendant’s conduct.
What are Economic Damages?
Economic damages refer to quantifiable financial losses suffered by the plaintiff. For example, if you are in a car accident, your economic damages may include the following:
- Medical bills to treat your injuries immediately following the accident;
- If you require long-term care, your projected future medical expenses;
- The cost of repairing or replacing your car and other damaged property property;
- Lost wages from time you had to miss from work;
- The loss of any fringe benefits arising from your employment;
- Your total estimated loss of future “earnings capacity”; and
- Your inability to render “household services,” such as cooking, cleaning, shopping, gardening, et cetera.
Economic damages are distinct from noneconomic and punitive damages. Noneconomic damages refer to injuries that cannot readily be quantified, such as the plaintiff’s “pain and suffering” or a spouse’s “loss of consortium.” Punitive damages are meant to punish a defendant for willful or malicious conduct rather than compensate a plaintiff for particular injuries.
Factors a Court May Consider
Every plaintiff and personal injury case is unique. For instance, if a plaintiff seeks economic damages for loss of “earnings capacity,” a court look to the plaintiff’s current job and wages in assessing economic damages. Hence, a filing clerk making $22,00 per year may receive less for lost wages and lost earning capacity than a highly skilled plumber earning $40,000 per year.
If a plaintiff’s injuries are so severe they are unlikely to ever work again, the court will have to consider the total loss of income over the remainder of the plaintiff’s estimated life expectancy. This can include not only future lost wages but also Social Security and other retirement benefits. If the plaintiff owned or operated a business before the accident, the loss of that income must also be considered. A court may also account for estimated price inflation over time.
While there is always some degree of speculation as to future income, a plaintiff must present some evidence that enables the court to make a reasonable extrapolation. A jury is generally not permitted to merely guess with regard to earnings capacity. There are some exceptions, however, such as where the plaintiff is a minor with no established work history.
This is only a brief overview of the process. Determining economic damages is often the most complicated part of a personal injury case, even more so than establishing the defendant’s liability. There are many cases where a defendant will concede liability but challenge the amount of damages owed.