When an injured party files a personal injury lawsuit, they may be entitled to two primary types of compensation: economic damages and non-economic damages. However, understanding economic vs. non-economic damages can be fairly challenging for victims if they have less experience with personal injury lawsuits. However, learning the difference between the two matters while seeking compensation for medical bills and more.
Why Economic Vs. Non-Economic Damages Matter
These damages compensate victims for losses caused by another party’s negligence or reckless behavior. Understanding the difference between economic vs non-economic damages in injury lawsuits is crucial when pursuing a fair settlement.
Victims often face financial burdens after an accident, including mounting medical expenses, lost wages, and long-term care costs.
Additionally, the emotional toll of pain and suffering, and emotional distress can be overwhelming. With the right legal representation, an injured party can navigate the legal system to secure the compensation they deserve.
Economic Damages: Quantifiable Financial Losses
Economic damages refer to tangible financial losses that a plaintiff suffers due to an injury. These damages are easily calculated and documented, ensuring that victims can seek compensation for their actual costs. Common forms of economic damages include:
Medical expenses:
This category includes all costs associated with medical care, from hospital bills to medical treatment and medical equipment such as crutches, wheelchairs, or prosthetics. Additionally, victims may need to account for future medical expenses, particularly if their injuries require prolonged treatment, ongoing therapy, or multiple surgeries.
Lost wages:
If a person is injured to the extent that they cannot work, they are entitled to compensation for their lost income. This applies whether the victim is temporarily unable to work or has sustained severe injuries that result in long-term or permanent disability. Courts consider future wage losses by evaluating the victim’s earning potential and diminished earning capacity.
Property damage:
If an accident results in personal property damage, such as a car accident where a vehicle is severely damaged or totaled, victims can claim compensation for repairs or replacement costs. Property damage claims may also extend to personal items like electronics, clothing, or valuable possessions lost due to someone else’s negligence.
Rehabilitation costs:
Many injuries require prolonged treatment, such as physical therapy, chiropractic care, or specialized rehabilitation programs to help victims regain mobility and function. These expenses are often overlooked in personal injury cases, yet they are essential to ensuring full recovery.
Out-of-pocket expenses:
Beyond medical costs, victims often face additional expenses, including transportation to medical appointments, prescription medications, home healthcare services, and necessary home modifications to accommodate physical limitations.
Earning capacity:
In cases where an injury results in a long-term inability to return to a previous profession or work at full capacity, compensation is awarded for the victim’s diminished earning capacity. Courts assess factors such as the victim’s age, occupation, and skills to estimate the future impact on income.
Financial losses:
Victims may experience a variety of quantifiable financial losses, including actual financial losses, tangible losses, and monetary losses related to their injuries. These expenses directly impact a person’s financial stability, often resulting in debt accumulation or bankruptcy due to excessive medical and living costs.
These costs can accumulate rapidly, making it crucial to have an experienced personal injury attorney assess and calculate the full scope of economic damages.
Non-Economic Damages: Intangible Losses
Non-economic damages, unlike economic losses, are subjective and difficult to quantify. They compensate victims for emotional and psychological suffering, often categorized as intangible losses.
Common non-economic damages include:
Pain and suffering:
This refers to the physical discomfort, chronic pain, and ongoing suffering that result from an injury. Victims of severe injuries may experience long-term or permanent pain that diminishes their quality of life.
Emotional distress:
Many victims suffer from post-traumatic stress disorder (PTSD), mental anguish, anxiety, depression, or other psychological challenges following an accident. This form of non-economic damages addresses the emotional hardship caused by the injury and its aftermath.
Loss of enjoyment of life:
Injuries may prevent victims from engaging in hobbies, recreational activities, or social interactions they once enjoyed. Compensation for loss of enjoyment of life acknowledges the drastic changes in a victim’s lifestyle due to the injury.
Loss of companionship:
Also known as loss of consortium, this refers to the emotional and social impact that an injury has on relationships with family members, including spouses, children, or close relatives.
Mental anguish:
This term encompasses emotional suffering, ongoing stress, and long-term psychological trauma that victims may endure due to reckless behavior or gross negligence.
Non-economic damages:
Unlike economic damages, which have a clear financial value, noneconomic damages are subjective and vary widely from case to case. Courts may use methods such as the multiplier method or the per diem method for calculating non-economic damages.
Courts often struggle to assign values to non-economic damages, making legal representation critical in securing a fair settlement.
State-by-State Compensation Limits for Economic and Non-Economic Damages
Different states impose varying limits on economic damages and non-economic damages. Below are some examples:
- California: Non-economic damages in medical malpractice cases are capped at $250,000 under California Civil Code § 3333.2.
- Texas: Non-economic damages in medical malpractice cases are capped at $250,000 per defendant, with a total cap of $750,000 for multiple providers (Texas Civil Practice & Remedies Code § 74.301).
- Florida: Previously capped non-economic damages in medical malpractice cases, but the cap was overturned in Estate of McCall v. United States, 134 So.3d 894 (Fla. 2014).
- New York: No cap on non-economic damages, but economic damages must be proven with quantifiable financial losses (New York Civil Practice Law & Rules § 3017).
- Nevada: Limits pain and suffering damages to $350,000 in medical malpractice cases (Nevada Revised Statutes § 41A.035).
- Ohio: Caps non-economic damages at $250,000 or three times economic damages, up to $350,000 per plaintiff (Ohio Revised Code § 2315.18).
Statutes Governing Pain & Suffering Calculations
Courts determine pain and suffering damages using various legal guidelines. The following statutes govern their calculation in different jurisdictions:
- California: Jury discretion applies, but must be “reasonable and based on evidence” (California Civil Code § 3281).
- Illinois: Courts use a “reasonable compensation” standard under 735 ILCS 5/2-1115.2.
- Nevada: Places specific limits on pain and suffering claims.
- Texas: Allows multipliers to be applied to economic damages when calculating non-economic damages.
Court Rulings on Disputed Damages
Legal disputes over economic vs non-economic damages often reach higher courts. Key cases include:
- State Farm Mutual Automobile Insurance Co. v. Campbell, 538 U.S. 408 (2003): The U.S. Supreme Court ruled that excessive punitive damages violate due process.
- McCall v. United States, 134 So.3d 894 (Fla. 2014): Florida Supreme Court struck down non-economic damages caps in wrongful death medical malpractice cases.
- Exxon Shipping Co. v. Baker, 554 U.S. 471 (2008): Limited punitive damages in maritime cases.
- Gore v. BMW of North America, 517 U.S. 559 (1996): Established guidelines for determining compensatory damages versus punitive damages.
- Davis v. MCI Telecommunications Corp., 120 F.3d 183 (1997): Addressed issues of mental anguish and noneconomic damages in personal injury cases.
- Campbell v. State Farm, 65 P.3d 1134 (2001): Determined how punitive damages should be evaluated in relation to compensatory damages.
How an Experienced Personal Injury Attorney Can Help
Navigating the legal system after an accident can be overwhelming. A skilled personal injury attorney can assess the case, negotiate with the insurance company, and ensure the injured party receives compensatory damages.
Whether dealing with medical malpractice cases, personal injury claims, or personal injury cases involving noneconomic damages, legal guidance is crucial.
Seek a Free Consultation Today
If you or a loved one suffers injuries in an accident caused by another’s reckless behavior, you may be entitled to claim damages. Contact an experienced personal injury attorney today for a free consultation and pursue the fair settlement you deserve.
Recovering compensation for both economic and non-economic damages can significantly improve your quality of life after an injury. Understanding your legal rights and partnering with an experienced attorney at Bourassa Law Group will help ensure you obtain the full compensation you deserve.
1-800-870-8910