Economic vs Non-Economic Damages Explained 

Maxey McFarland Law Firm > Blog > Economic vs Non-Economic Damages Explained 

Personal injury claims often involve complex calculations to ensure fair compensation for victims. At Maxey McFarland Law Firm, our Greenville personal injury lawyers strive to educate our clients about the two main categories of damages, or compensation, they can pursue: economic and non-economic.

Economic damages are compensation for the tangible financial losses that result from an injury. They are typically easier to quantify based on concrete financial records and projections.

Non-economic damages are compensation for the intangible losses that significantly impact a victim’s quality of life. While more challenging to calculate, these damages are crucial in recognizing the full extent of an injury’s impact on a person’s well-being.

Defining Economic Damages

Economic damages compensate an injured person for the tangible, quantifiable losses they suffered due to an injury or accident. These damages directly correlate to specific monetary expenses or losses incurred by the victim. The primary goal of economic damages centers on restoring the injured party to their financial position before the incident occurred.

Types of Economic Damages

Economic damages encompass a wide range of financial losses, including:

  • Medical expenses (current and future)
  • Lost wages and reduced earning capacity
  • Property damage
  • Out-of-pocket expenses related to the injury

Medical expenses form a significant portion of economic damages. This category covers all costs related to medical treatment, from emergency care to long-term rehabilitation. Future medical care also falls under this umbrella, requiring careful estimation based on expert opinions and treatment plans.

Lost wages constitute another crucial component of economic damages. When injuries prevent a victim from working, they can claim compensation for missed work days, reduced earning capacity, and lost benefits or bonuses. In severe cases where injuries result in long-term disability, economic damages may include calculations for lifetime earning potential.

Calculating Economic Damages

Determining economic damages involves a relatively straightforward process of compiling and totaling all quantifiable expenses and losses. Attorneys and their clients gather relevant documentation, including:

  • Medical bills and records
  • Pay stubs and employment records
  • Repair estimates for damaged property
  • Receipts for out-of-pocket expenses

In cases involving long-term injuries or disabilities, expert testimony is sometimes necessary to project future medical costs accurately and to quantify lost earning potential. Economic experts can provide detailed analyses of how injuries might affect a person’s career trajectory and lifetime earnings.

Understanding Non-Economic Damages

Non-economic damages compensate victims for intangible losses that lack a specific monetary value. These damages address an injury’s physical, emotional, and psychological impact on a person’s life. While more challenging to quantify, non-economic damages often constitute a significant portion of personal injury awards.

Types of Non-Economic Damages

Non-economic damages cover a range of intangible losses, including:

  • Pain and suffering
  • Emotional distress
  • Loss of enjoyment of life
  • Loss of consortium
  • Disfigurement and scarring

Pain and suffering is the most well-known category of non-economic damages. This encompasses physical pain and discomfort resulting from injuries and ongoing chronic pain that may persist long after the initial recovery period.

Emotional distress forms another crucial component of non-economic damages. Injuries can lead to significant psychological impacts, including anxiety, depression, fear, and sleep disturbances. Compensation for these mental health effects falls under the umbrella of non-economic damages.

Calculating Non-Economic Damages

Determining the value of non-economic damages can be particularly challenging due to their subjective nature. Courts and attorneys utilize various methods to assess these damages, each with its own strengths and limitations:

  • Multiplier Method: This widely used approach involves multiplying the total economic damages by a multiplier. The multiplier typically ranges between 1.5 and 5, depending on the severity of the injuries and their impact on the victim’s life.
  • Per Diem Method: Alternatively, some attorneys, insurers, and courts prefer the per diem method. Here, a daily rate is assigned to the victim’s pain and suffering, and this rate is then multiplied by the number of days the victim has experienced or is expected to experience these effects.
  • Jury Determination: In many cases, the value of non-economic damages is ultimately decided by a jury. Juries consider the evidence presented, including medical records, expert testimony, and personal accounts from the victim and their loved ones. They evaluate the extent of the suffering and loss of enjoyment of life caused by the injuries and then determine a fair and just compensation amount.

Each method has its place in the legal landscape, and experienced attorneys tailor their approach based on the specifics of each case. By carefully weighing these methods and applying them judiciously, legal professionals strive to secure appropriate compensation for their clients’ pain, suffering, and diminished quality of life resulting from someone else’s negligence.

Factors Influencing Non-Economic Damages

Several key factors can significantly affect the value of non-economic damages in a personal injury case:

  • Severity of injuries
  • Impact on daily life and activities
  • Age of the victim
  • Pre-existing conditions
  • Credibility of the victim

The severity of injuries plays a crucial role, with more severe or permanent injuries typically resulting in higher awards. The degree to which injuries disrupt the victim’s ability to perform daily activities and enjoy life also heavily influences the award amount.

Challenges in Proving Non-Economic Damages

Establishing the value of non-economic damages presents unique challenges due to their subjective nature. Unlike medical bills or lost wages, pain and emotional distress leave no paper trail. This lack of tangible evidence can make assigning a universal value to these losses difficult.

To overcome these challenges, attorneys employ various strategies:

  • Detailed pain journals created by the injured person
  • Expert testimony from medical professionals and psychologists
  • Visual evidence (photos, videos, day-in-the-life documentaries)
  • Witness statements from friends and family

These methods help document the ongoing impact of injuries on daily life and provide compelling evidence to support claims for non-economic damages.

Contact Maxey McFarland Law Firm Today

Let us handle the legal intricacies while you focus on your recovery and rebuilding your life with confidence and peace of mind. Taking on a claim, proving it, and performing damage calculations requires skill, experience, and a deep understanding of personal injury law. If you’ve suffered injuries due to someone else’s negligence, don’t leave your compensation to chance.

Call the experienced Greenville personal injury attorneys of Maxey McFarland Law Firm today at 864-900-4231 or contact us online for a free consultation. Our dedicated team will evaluate your case, explain your rights, and fight tirelessly to secure the full range of damages you deserve.

Last Updated: 07-09-2024
Written By: Will Maxey