WHAT IS ECONOMIC DAMAGE COMPENSATION?Last updated on: October 28, 2022
When you claim a personal injury lawsuit, you are asking to be compensated for a harm (damage) that has occurred to you; oftentimes in specific and quantifiable ways.
For example, if you have been injured by someone and are asked to pay for medical care as a result, your damages would be the cost of your medical bills.
An experienced personal injury lawyer will be able to help you determine the damages you should request in your case.
If you or a loved one has been injured and you are wondering about damages, contact Zinda Law Group today for a free case consultation.
ECONOMIC VS NON-ECONOMIC COMPENSATION
In general, the purpose behind compensation for injury lawsuits is to put the individual who was injured into the position he or she would have been in had the injury not occurred—to make the individual whole again.
However, not all damages can be easily calculated into whole amounts. This is the difference between economic and non-economic damages.
WHAT ARE ECONOMIC DAMAGES?
Economic damages are damages that were a direct monetary loss.
If your car was damaged in a car accident and the bill to repair it was $10,000, then the accident has cost you $10,000, and in order to put you back in the exact same place you were in before the accident, the at-fault party should compensate you $10,000.
In theory at least, once you have that $10,000 it will be like the accident never happened, because your situation is the same as it was before—you have a non-damaged car, and you did not have to pay for the repairs.
WHAT ARE NON-ECONOMIC DAMAGES?
It seems easy to calculate economic damages, but many accidents have consequences that don’t have a direct price on them such as a repair or a medical bill. For example, say you have had your leg broken in an accident that was the fault of someone else. Your hospital bill to treat your broken leg comes to $5000, so your economic damages are $5000.
But if you just receive $5000, will you be in the same place you were in before your leg was broken? It’s likely that you will not be.
You may have missed important life milestones or personal events while you recovered, or traumatic memories of the accident that impair your ability to lead a normal life—if the accident is really bad, you may not be able to use your leg the same way even after you have received treatment.
None of these things come with a receipt or a specific dollar amount that they have cost you, but they are all costs of the accident.
The legal system recognizes that simply paying for the costs incurred by the accident does not always leave the injured party in the place they would have been if the harm hadn’t been done to them, because there are often problems arising from the accident that don’t cost money. Thus, the court will consider non-economic damages as well as economic ones when determining how much a defendant may have to pay.
Of course, non-economic damages are much more difficult to calculate than economic damages because money is not a direct solution as it is with economic damages—how do you put a price on loss of enjoyment from a hobby due to injury, or even the pain of missing a deceased spouse?
Money is no real replacement for these things, but it is the only efficient method the court has of addressing these harms to some degree.
WHEN ARE ECONOMIC AND NON-ECONOMIC DAMAGES AVAILABLE?
Economic damages may be available whenever there is a verifiable, quantifiable cost arising from your personal injury case.
Generally, economic damages are in some way a loss of money. Repairing damaged property and receiving medical care are two very common quantifiable costs, but there are also other cases where the harm suffered by the plaintiff is one that is reversed by receiving the money that was lost due to the harm—for example, a financial planner making a negligent mistake and costing his client money.
Non-economic damages are available whenever there is a harm done without a quantifiable cost. In most cases, both economic damages and non-economic damages are asked for in the same lawsuit, as most situations cause quantifiable and non-quantifiable harm.
HOW ARE ECONOMIC DAMAGES CALCULATED?
Unlike non-economic damages, which can be difficult to calculate, economic damages are more simple because they are each linked to a specific cost. If your car costs $10,000 to repair, the economic damages are $10,000. If your broken arm costs you $5,000 in medical bills and $2,000 in lost wages, your economic damages are $7,000.
There are times economic damages can be more complex to calculate, though.
For example, if your car is totaled, and you bought it 10 years ago for $20,000, you are not owed $20,000 because your car was not worth the same amount it was 10 years ago when it was new. The court may determine your car was only worth $10,000 at the time of the accident, and thus your economic damages would only be $10,000, because if that was the amount your car was worth at the time of the accident, that was the amount you lost when it was totaled.
Remember that the objective is to place the individual in the position they would have been in if the accident had not occurred. In this example, even if the accident had not occurred, your car would still have lost $10,000 worth of value over the 10 years since buying it, so getting $20,000 would actually place you in a better position than you would have been without the accident, which is not the objective.
ECONOMIC DAMAGES COULD BE NOW OR IN THE FUTURE
Economic damages need to be quantifiable, but they do not have to be immediately incurred at the time compensation is requested.
For example, if you are injured and told you will be unable to work at your job for six months, you can put an exact price on how many wages you would have earned in six months, and calculate that as your loss, even though at the time of filing your lawsuit, the six months may not have elapsed, so you have not been cost those wages yet.
Another common future economic damage is ongoing medical treatment. If you will need to take a medication for the rest of your life as a result of your injury, which will cost you $50,000 over the next forty years, your economic damages would be $50,000 even though you have not yet paid $50,000 for the forty years worth of medicine, because that is the amount you will eventually lose as a result of the injury.
WHAT ARE THE ECONOMIC DAMAGES IN A PERSONAL INJURY LAWSUIT?
Injuries that require extensive or even brief medical checkups along with therapy or medication will cost a hefty penny. These damages can be compensated only if you’re acting responsibly according to your injury, meaning going to check-ups regularly and following your doctor’s orders.
LOST INCOME AND BENEFITS
If you will miss out on earning money or benefits in the future due to your injury, you can receive compensation.
PAST LOST WAGES
You can also recover for wages you have lost since you have been harmed if you are unable to work, or work at the same level as before.
Services like a nurse could be required should your injury be severe enough.
OTHER OUT-OF-POCKET EXPENSES
Any other cost that is caused by your injury could be an economic damage. This could include having to remodel your home to accommodate an injury as well as less obvious costs such as transportation to and from medical centers.
MENTAL HEALTH TREATMENT COSTS
While the idea of damages for pain and suffering is a non-economic damage, actual treatment of emotional suffering has a specific quantifiable cost, and is thus an economic damage.
Damage to your vehicle should be covered by your insurance yet it’s possible that you’ll be required to pay out of pocket. For this and any other property damage you should keep any and all receipts to a mechanic.
IS THERE A LIMIT TO THE ECONOMIC DAMAGES THAT YOU CAN RECOVER IN A PERSONAL INJURY CASE?
Many states have limits on how much a plaintiff can recover in a personal injury case. In many states, these limits are also influenced by the type of injury and its seriousness—property damage in a drunk driving case may have a lower limit on damages than wrongful death in a drunk driving case does.
Additionally, courts abide by the principle that parties have a duty to mitigate their damages whenever possible. This means that an injured plaintiff must make the best of his situation and try to put himself as close to the position he was in before the accident before expecting the court to award damages to make up for the rest.
For example, if a plaintiff who used to make $50 per hour is now unable to work at that job, but he is able to work at a job that pays $10 per hour, the court will not award damages at the $50 an hour rate, but will expect him to work for $10 per hour, and his damages would be the $40 per hour he is missing out on due to his injury.
HOW MUCH COMPENSATION CAN BE REFUNDED?
In some cases, you may have been receiving some form of government assistance after an injury or harm that will need to be refunded, most commonly Medicare.
If Medicare is billed for your medical treatment, and you receive compensation for your medical treatment as part of your personal injury case, the money billed to Medicare will have to be refunded.
However, this should be expected and included in your initial claim for damages, so make sure your lawyer is aware of how all of your expenses have been covered.
CONTACT ZINDA LAW GROUP TODAY
If you or a loved one has been injured, the personal injury attorneys at Zinda Law Group can help you determine what economic or non-economic damages might have been incurred.
With Zinda Law Group, you do not have to worry about affording excellent legal representation—Zinda Law Group’s No-Win, No-Fee Guarantee means that you pay nothing unless you win.