How are Personal Injury Damages Calculated?
Personal injury claims are based upon negligence and misconduct that can apply to a wide range of circumstances. You or a loved one may have incurred serious injuries in a car crash, due to medical malpractice, by a slip & fall accident on public/private property, because of a defective commercial product, or some other kind of accident. Whatever the case, Personal Injury Attorney, can help you establish liability and calculate the value of your claim. Personal injury victims endure a great deal of physical and mental anguish in relation to their injury, thus they are entitled to claim compensation from the at-fault party.
Damages sustained in any personal injury case are divided into two main categories:
- Compensatory Damages
- Punitive Damages
Calculation of Compensatory Damages
Compensatory damages comprise all the actual losses encountered by a personal injury victim because of the careless or malicious behavior of an entity. Compensatory damages are further divided into two subcategories, namely economic and non-economic damages. Economic damages also referred to as ‘special damages’, have a fixed or definite monetary value. Determining the cost of special damages is of utmost importance, as it lays the foundation for estimating a reasonable amount for other damages as well.
Special damages are typically broken down into five separate sections:
If your injuries were not serious enough to seek medical attention, your claim is likely to get rejected. Severe injuries require immediate and/or long-term treatment, which can add up to thousands of dollars in medical bills. It doesn’t matter if you paid the expenses out of pocket, took a loan, or mostly got covered by your medical insurance policy. The total expenditure on healthcare-associated with the injuries is compensable, which means that the at-fault party’s insurer will pay for it. You shall have to provide medical records and receipts for verification.
You may have taken time off from work to recover from your injury. It could be days, weeks, or even months in case of a severe condition. Your employer will naturally deduct pay in relation to your absence, which accounts for missed earnings. Some victims are able to avail PTO (paid time-off) or other time-off benefits, but that will not affect the value of missed earnings; you will mention the amount as if it was not paid.
If an accident caused you damage or loss of valuable property, the perpetrator can be held liable to pay for its repair or current market value. Compensation for property damage is normally applicable to auto accidents where the victim’s vehicle was totaled or partially destroyed. It may not be available in other personal injury cases.
Cost of ongoing Healthcare
If you are still receiving healthcare for your injuries and treatment is expected to be continued, you are entitled to compensation for ongoing and future medical expenses. Estimating the true cost of ongoing medical treatment can be tricky, thus you will need the input of an experienced personal injury attorney and healthcare professional.
Future Lost Income
In case of a chronic or permanent injury, you may not be able to resume your previous job or continue working in the same capacity. In some cases, victims have to change their line of work or work lesser hours, which results in reduced income. The at-fault party shall have to make up for the difference in income or grant financial support that lasts the entire recovery period.
Once a dollar amount for your special damages has been specified, your attorney will compare this with the maximum value covered by the defendant’s insurance policy. Most of the time, the amount left after deducting special damages is secured for non-economic or ‘general damages’. For example, if the defendant has an insurance policy worth $100,000 and the number of your special damages to $25,000 then your lawyer will demand that the remaining $75,000 be awarded to compensate for general damages.
General damages are called non-economic damages because they don’t have a definite face value. They refer to the pain and suffering inflicted upon the victim as the result of the injury-causing incident. For example, many car accident victims experience PTSD (Post Traumatic Stress Order) even after physical injuries have healed. They may develop a phobia or depression that prevents them from leading a normal life. Some victims require prolonged mental therapy and emotional support to recover from a traumatic accident. General damages also include loss of consortium or the inability to retain previous relationships.
The value of general damages depends upon the severity of injuries sustained and its consequences upon the victim’s day-to-day life. The amount assigned to general damages is basically a multiplier to the value of special damages; the gross value of economic damages is multiplied by a number between 1.5 and 5. If the victim’s injuries are fatal and caused permanent incapacitation, the legal representative will go for the 4 or 5. The insurer would aim for a lesser multiplier, possibly a 2 or 3; lesser, if the damages are reversible or not very serious.
The settlement amount is calculated by adding the values of special and general damages. Your lawyer will ask for slightly more than the estimated worth of your claim to settle the case, and the insurer may respond with a counter offer. If the counteroffer is too low or unreasonable, the lawyer may continue to negotiate or pursue a lawsuit. About 95% of personal injury cases are resolved through an out-of-court settlement because litigation is expensive for both sides.
What about Punitive Damages?
Punitive damages are not applicable to personal injury settlements because they are awarded by a court judge or jury. When you accept an out-of-court settlement, you give up the right to sue the defendant. Punitive damages should only be sought if the defendant’s actions were unforgivable and they deserved to be punished. For example, their wrongdoings may have life-threatening consequences and the potential to harm many others like you.
The jury may also approve of awarding punitive damages if the defendant harmed you intentionally (with a malicious motive), and therefore disciplinary or corrective penalties are necessary to discourage such behavior in the future. The value of punitive damages is usually two or three times the alleged settlement amount (combination of special and general damages), but could be less with respect to details of the case.