Financial awards in personal injury cases are often called damages. A plaintiff with a personal injury claim that ends up in court may get awarded compensatory damages. These damages are typically a combination of economic and noneconomic damages.
It is crucial for plaintiffs to understand the difference between these types of damages because the way to document and prove economic damages is completely different from the way to document and prove non-economic damages.
Both of these types of damages play a significant role in determining fair compensation.
What Are Economic Damages?
Economic damages involve tangible losses which victims incur or will incur due to their injuries. It is possible to place an objective value on these damages. These damages are concrete and can be easily calculated and readily documented via clear and convincing evidence.
Common Types of Economic Damages
Common types of economic damages which you can recover from an insurance company or an at-fault party include:
Medical Bills
You might already owe health care providers money in the form of medical expenses related to your injuries. In addition, your injuries may necessitate future medical treatment which will lead to additional medical expenses. A personal injury lawyer can help you recover compensation for all past and future medical bills related to your injuries. Personal injury lawyers usually offer a free consultation, so there is no risk in calling one.
Lost Wages
Lost wages involve the wages you’re unable to earn due to your injuries. This can include wages you’re unable to earn because you’re hurt too badly to work, or because you have to take time off from work to have your injuries treated. A personal injury attorney can help you recover any wages you’re unable to earn due to your injuries. For example, if you develop cancer due to exposure to Roundup, you might have to miss time from work for cancer treatments, and a lawyer can help you recover the wages you lose in the process.
Loss of Earning Potential
When injuries cause plaintiffs to become disabled, this disability represents a loss or reduction of earning potential which injury lawyers can help them recover financial compensation for. For example, if you develop Parkinson’s disease as a result of exposure to paraquat, you may no longer be able to work, and an attorney can help you recover compensation for your lost earning potential.
Property Damage
If you incurred any property damage as a result of your accident, a lawyer can help you recover compensation for that property damage. A common example is that a lawyer can help you recover compensation for your damaged or totaled car after a car accident.
Wrongful Death
If you lost a loved one due to someone else’s negligence, this loss may represent several tangible damages, including:
- Your loved one’s burial and funeral costs
- The loss of your loved one’s income
- Your loved one’s medical bills
Family members can recover financial compensation for these economic damages with the help of a wrongful death lawyer.
Calculating Economic Damages
In order to be able to calculate economic damages, you need to document your economic damages. This involves preserving things like receipts, bills and financial records.
For medical bills, keep copies of all bills related to your medical treatment. Keep receipts for all medications related to your injuries.
Financial documents such as bank statements or pay stubs can be useful in establishing the difference between your income prior to your injuries and your income following your injuries. As an example, if you needed to miss work to attend doctors appointments or heal, this will demonstrate your lost wages.
Your paychecks may also be utilized to demonstrate the long-term consequences of your injury, together with expert witness testimony, regarding a reduction or loss of earning capacity. Plaintiffs who sustain injuries which prevent them from advancing their careers or force them to take lower-paying jobs can lose decades’ worth of possible wages.
You might need to rely on public transportation, rideshare services, rental cards or paying friends for gas money while your car gets repaired after an accident. Transportation costs can pile up quickly. Keep documentation of all of your transportation costs after your accident.
In addition, if your vehicle was damaged by the negligent actions of another motorist, you have probably received a bill from a mechanic. Keep this bill.
What Are Non-Economic Damages?
Non-economic damages are subjective damages. They are related to harm types which don’t come with receipts or additional objective documentation. Objective values cannot be placed on these damages. Because objective receipts or bills can’t document these damages, they can be challenging to quantify. Non-economic damages can be capped in medical malpractice cases.
Examples of Non-Economic Damages
Examples of non-economic damages include:
Pain and Suffering Damages
Those who are injured due to the negligence of others often end up having to endure physical pain and mental suffering. While an objective value cannot be attached to pain and suffering, experienced personal injury lawyers know how to place accurate values on pain and suffering and make sure you’re fairly compensated for it.
Emotional Distress
Emotional distress damages reimburse victims of accidents for the psychological impact their injuries have on their life quality. There are many ways that emotional distress may affect your life, including:
- Mood swings
- Post-traumatic stress disorder
- Problems sleeping
- Depression
- Rage and anger
- Anxiety
Disfigurement
Disfigurement can have profound effects upon a victim’s psychological state as well as their social life. These effects cannot be objectively quantified, so disfigurement damages are non-economic damages. A lawyer can help calculate the value of the effect that disfigurement will have upon your life and make sure you’re justly compensated for it.
Loss of Quality of Life
Your injuries may cause the quality of your life to decline. You may no longer be able to do everyday activities, or fully enjoy your marriage, due to your injuries. These are damages which can’t be objectively quantified, but an injury lawyer can help place a value on them and make sure you’re fairly compensated for them.
Punitive Damages
Punitive damages are damages intended to punish wrongdoers and discourage others from similar behavior in the future. Not every personal injury case involves punitive damages. However, when personal injury cases involve intentional or reckless conduct, they may involve punitive damages.
Strategies for Documenting Non-Economic Damages
The first step towards valuing non-economic damages is documenting them.
Medical records are vital for verifying damages. They provide proof that an injury happened. As an example, medical records may show you got a chronic pain diagnosis and that you now lack full range of motion in an arm.
This would help to validate a claim regarding pain and suffering damages. This would also help validate a claim regarding loss of quality of life damages. Your medical records would demonstrate you’re no longer to do things like play sports with friends, pick your child up, or fulfill duties at a job you enjoy.
Visual documentation can help to document non-economic damages. As an example, a video of your struggle to eat after an injury to your spinal cord could help document your loss of quality of life damages. A picture of your totaled vehicle can communicate your collision’s severity, validating your emotional distress claim.
Keeping a pain journal can help validate your pain and suffering damages. It can help even more if you’re able to quantify your pain each day on a scale of one to 10.
Methods for Valuing Non-Economic Damages
Insurance companies generally use one of two methods to calculate pain and suffering damages after an accident: the “per diem” method and the “multiplier” method.
The per diem method involves assigning a daily value to pain and suffering and multiplying that value by the amount of days that pain and suffering occurs. As an example, if your pain and suffering is assigned a value of $150 per day and your recovery takes 150 days, you would receive an offer of $22,500 for pain and suffering from the insurance company.
The multiplier method involves calculating your economic damages and then multiplying them by a multiplier, typically a number between three and 10. The multiplier chosen depends upon the extent of your pain and suffering. This extent gets determined via testimonies and your documentation of your pain and suffering.
The Role of Legal Counsel in Maximizing Compensation
Lawyers play a huge role in maximizing compensation in personal injury cases.
Lawyers can maximize your compensation in an injury claim via:
Experience and Expert Knowledge
Personal injury attorneys possess extensive experience handling injury cases. They know all of the nuances of legal procedures, insurance policies and state laws. This lets them build a strong case for you, making sure all legal aspects get covered and no details get overlooked. Their experience regarding negotiations with insurance companies also plays a vital role in recovering a larger settlement.
Thorough Investigation
A vital aspect of maximizing your compensation is collecting comprehensive evidence which supports your claim. A lawyer will thoroughly investigate your accident. This investigation will include:
- Gathering medical records and police reports
- Interviewing witnesses
- Analyzing videos and pictures of the scene of the accident
- Consulting with experts in accident reconstruction
This helps to establish liability and prove the extent of any damages and injuries, making your claim stronger.
Accurate Claim Valuation
A lawyer will consider numerous factors when determining the value of your claim, such as:
- Past and future medical bills
- Pain and suffering
- Lost wages
- Lost earning capacity
- Property damage
- Emotional distress
By providing an accurate claim value, your lawyer will make sure you recover compensation for all losses, not simply immediate losses.
Negotiations With Insurance Companies
This is perhaps the most important thing a lawyer can do to maximize your compensation. In California, when people injure others via negligence, they’re obligated under the law to pay for any damages related to those injuries. This generally means the at fault party’s insurance company has an obligation to pay for your damages up to policy limits.
However, the insurance company knows that this obligation can only be enforced via civil court. This means the insurance company knows you can only force them to pay you what you deserve by suing them and winning. If you can’t sue them and win, they know they don’t have to pay you what you’re entitled to. If you don’t have a lawyer, they know you can’t sue them and win. So if you don’t have a lawyer, they won’t offer you anything but a fraction of what you’re entitled to.
The mere act of hiring a lawyer is the single most important thing you can do to maximize your compensation. Once insurance companies know you’re represented by a lawyer, and once that lawyer starts negotiating with them for you, the insurance companies know they won’t be able to get away with a low ball settlement offer. Most of our cases settle out of court because insurance companies know it’s a bad idea to go to court against us.
In addition, insurance companies will use dirty tricks to minimize your settlement, like offering tiny settlements, disputing your injuries’ severity, denying liability, or even tricking you into saying things which can devalue your claim. Experienced injury lawyers understand these tactics and know how to effectively counter them. They can aggressively negotiate for you, leveraging knowledge and evidence to maximize your settlement. They can handle all communications with insurance companies for you so you don’t need to worry about incriminating yourself.
Jeffrey Nadrich
Jeffrey Nadrich is a nationally-recognized California plaintiff’s personal injury attorney. He is a graduate of UC Berkeley and UC Hastings College of the Law. He has successfully represented thousands of injury clients over the last 40 years.
