6 Things to Know About Economic Damages

Source: attorneyatlawmagazine.com

If you’re ever hurt in an accident, and it’s someone else’s fault, a personal injury lawsuit might be a way to get compensation for your medical bills, lost wages, and more. When calculating the possible award in a personal injury case, your claim will deal with economic damages, according to the Allen Law Firm.

These damages are a form of compensation for financial losses after an injury, and they can be specifically calculated.

In general, legal damages are the money that compensates a victim in a personal injury case. There are three types of damages—economic, which we mentioned above, non-economic and punitive damages.

Again, economic damages can be counted easily, but non-economic damages can become more of a gray area. These are the legal damages that are meant to compensate a victim for the difficulties they experienced due to their accident. It’s not as easy to calculate these because they’re non-monetary and can compensate for emotional and psychological suffering after an injury.

Punitive damages are rare, and they’re meant not to compensate a victim but to punish the defendant and deter similar future behavior.

The following are six things to know about economic damages and their calculation in a personal injury lawsuit.

1. Economic Damages Are Specific

Source: forensicstrategic.com

Economic damage is specific, and it’s a way to compensate plaintiffs for their actual measurable losses.

Economic damages can be reimbursed for expenses that a plaintiff paid out of pocket because of their injury. Economic damages can include lost earnings, compensation for past or future medical expenses, and the costs associated with repairing or replacing damaged property.

These damages can also include lost business opportunities that are the result of injuries.

2. The Bulk Is Made Up of Medical Expenses

In most personal injury cases, the medical expenses make up the majority of the awarded damages. Medical expenses can include ambulance and hospital bills, therapy costs, the cost of medication, and more.

These can easily be calculated by adding together the amounts that are listed on hospital and pharmacy bills and receipts.

3. Calculating Economic Damages

Briefly above, we’ve touched on this, but economic damages are relatively easy to calculate, especially if a plaintiff has kept good records.

When you file an insurance claim after an accident, the insurance company investigates the accident. The company will likely request evidence supporting how much the person who was hurt is seeking damages.

Evidence can include paperwork demonstrating financial losses.

If a case goes to trial, the jury awards economic damages based on the evidence a plaintiff can show as well.

Future medical expenses can be included in a damages award if a plaintiff is able to properly show they’ll need further medical care because of their accident. Usually, this has to be proven through expert testimony from a treating physician.

Source: dmaeconomics.com

4. Calculating Lost Income

When calculating medical expenses can be relatively straightforward because you just need to look at medical bills and receipts.

Calculating lost income can sometimes require a little more work, although it’s still fairly easy to calculate it accurately.

If you typically make $5,000 a month and you’ve been out of work for three months, your past lost wages are $15,000.

There are plenty of situations where it can get more complicated, though. For example, are you self-employed? If so, your earnings vary from month to month. If you’re an hourly employee, your overtime could vary quite a bit, as well as your hours worked.

To calculate future losses, there are a lot of factors and unknowns that have to be accounted for. For example, what industry do you work in? Are your promotional chances limited by your injuries?

5. Limits On Non-Economic Damages

In most states, there isn’t a cap on economic damages. If you’re a plaintiff who’s able to successfully prove liability, you can recover the economic damages you’re able to subsequently prove.

6. The Concept of Comparative Negligence

In some states, there is a concept of comparative negligence. Comparative negligence is a tort law principle that’s applicable to casualty insurance in certain states.

Under the concept of comparative negligence, when an accident occurs, the fault and negligence of each party are based on their contributions to the accident.

Then, insurers can assign blame and pay insurance claims appropriately.

A lot of insurance companies will assign blame on a percentage basis. One driver might be 70% responsible for an accident, and the other 30%.

The determination of fault leads to a decision on how much an insurer is going to pay.

Source: simonlawpc.com

With comparative negligence, damages are awarded proportionally based on the percentage of negligence that’s determined. The party less responsible still gets a percentage of the blame assigned to them.

The percentage of negligence that the less responsible party is assigned is called contributory negligence.

The contributory negligence can be the plaintiff’s failure to show reasonable care for their own safety.

There are three types of comparative negligence.

The first is pure comparative negligence. Under this rule, a plaintiff can recover damages even if they’re 99% at fault for the accident. The plaintiff could still, in this scenario, recover 1% of the damages. There are thirteen states following this rule, including  New York and California.

Under the modified comparative negligence rule, a plaintiff can’t recover monetary damages if they’re at fault beyond a certain percentage. There are ten states that follow a 50% bar rule. A plaintiff can’t recover damages if they’re 50% or more at fault in an accident.

There are 23 states following a 51% bar rule. Under a 51% bar rule, plaintiffs can’t recover if they’re 51% responsible or more.

South Dakota is the only state that recognizes something called the slight/gross negligence rule. In this rule, fault percentages are replaced by slight and gross contributions to accidents.

Gross means a reckless disregard for the safety of the injured party. The award in an accident is greater if the plaintiff’s contribution is “slight” and the defendant’s is “gross.” The amount awarded to a plaintiff is less if their contribution is more than slight.