How Difficult Is Calculating Damages in a Lawsuit?

Calculating damages in a lawsuit can be tricky. However, knowing what your case is worth is crucial after suffering a personal injury. Without knowing the value of your claim, you risk leaving money on the table needed to pay your bills and keep your family afloat financially. Moreover, if it comes to a lawsuit, you will need to know whether to accept a settlement or keep fighting for what you deserve.

Morgan & Morgan can be here for you. We never settle for less. Our committed lawyers fight hard to give our clients the best chance at receiving the settlement they need to rebuild their lives. Contact us today for a free consultation to find out what your case could be worth.

Compensatory Damages Available in a Lawsuit

Compensatory damages common in personal injury cases can include economic and non-economic damages. 

Economic Damages 

Economic damages come will bills and receipts, can be relatively easy to calculate, and typically include:

Medical Expenses 

Personal injury compensation usually includes the cost of medical treatment for the injury suffered in an accident. Awards can consist of reimbursement for treatment you already received and medical care you will need in the future.  

Wage Losses

Injured victims could face a long recovery and may not return to work for some time. Therefore, you are generally entitled to compensation for any income loss resulting from a personal injury. Awards can also include amounts for the money you would have earned in the future if you had not been injured in an accident. 

Property Damage

If any of your personal property was destroyed or damaged in an accident, such as your car, clothing, eyeglasses, laptop, or other items, you are entitled to reimbursement. 

Depending on your case and the severity of your injuries, you could also receive other economic damages, such as:

• Out-of-pocket expenses
• Transportation costs
• Expenses for modifying your vehicle or home
• Costs for household assistance or a home health aide

Non-Economic Damages

Apart from the monetary or economic damages outlined above, victims could also qualify for non-economic damages. These damages relate to a person’s subjective losses, such as pain and anguish. Non-economic damages do not come with receipts or other objective documentation and include:

Pain and Suffering

If you suffered a significant injury due to the negligence or willful actions of another, you could qualify for compensation for the physical pain and discomfort you suffered. 

Emotional Distress

Emotional distress damages can arise in severe accidents and with a significant injury. If a personal injury victim experienced negative emotional consequences after an accident, such as anxiety, depression, insomnia, or post-traumatic stress disorder (PTSD), they could be entitled to damages.  

Loss of Life Enjoyment 

Some victims suffer life-changing injuries. They may be unable to partake in activities, exercise, or hobbies they enjoyed before the accident. These individuals could be entitled to "loss of enjoyment" awards.

Loss of Consortium

Loss of consortium damages relate to the injury’s impact on the victim’s spousal relationship. For instance, damages can be awarded for loss of companionship or sexual relationship due to accident injuries. 

Other potential non-economic awards in a personal injury lawsuit can include:

• Disability
• Loss of limbs
• Loss of a sense such as eyesight
• Permanent scarring

Punitive Damages in Personal Injury Lawsuits

Punitive damages are not intended to compensate the victim. Instead, they are designed to punish the defendant for their wrongdoing or recklessness. Punitive damages are generally rare in personal injury lawsuits. Courts are more likely to award punitive damages in wrongful death claims and intentional torts, such as homicides. Although punitive damages are not intended to compensate the injured party, victims receive the payout if a court awards punitive damages.

Punitive actions can be awarded in the following circumstances:

Gross Negligence – Gross negligence can occur, for example, when a drunk driver causes a severe accident with fatalities.

Willful Intent – Willful intent is the act of deliberately causing harm to another person, for example, in an assault.

Criminal Behavior – Criminal acts can include violating road laws and deliberately attacking or murdering an individual. 

Calculating Damages in a Lawsuit Can Be Complicated

There is no specific formula to calculate damages as they are usually determined based on the actual expenses of the victim and compensation for their pain and anguish. Compensation should make the injured person “whole” again. Putting a dollar figure on some damages, such as medical bills and out-of-pocket expenses, can be relatively easy, as there are bills, statements, and receipts. 

However, quantifying more subjective damages, such as physical pain, emotional distress, or loss of life enjoyment, can be challenging. Knowing your future costs, such as income losses and medical expenses, can also be tricky and usually involves liaising extensively with medical providers. 

How to Calculate Damages 

Calculating economic damages can be as easy as adding up all the expenses connected to the accident, such as income loss, medical bills, out-of-pocket costs, and others. Once you have a figure for economic damages, you can determine your non-economic losses, such as pain and anguish. Assessing your non-economic damages can be complicated as it involves considering factors such as:

• The scope and permanence of your injury
• The pain and anguish you experienced
• The length of recovery
• The general disruption to your life and career

The Formula for Calculating Non-Economic Damages

Insurance companies and lawyers typically use a formula to determine the amount of non-economic damages you could claim. For this, the sum of your medical bills will be multiplied by a factor of 1.5 to 5. The more severe or long-lasting a victim’s injuries are, the higher the multiplying factor will be. Minor injuries will be at the lower end of the multiplier. The idea behind basing non-economic damages on medical expenses is that higher medical expenses typically point to more serious injuries and greater suffering.

Suppose a victim suffered a minor injury and medical costs amounted to $2000. With the multiplier method, they could ask for $3000 in non-economic damages ($2000 x 1.5). On the other spectrum, an individual with a life-changing injury and $150,000 in medical bills could potentially seek 750,000 ($150,000 x 5) in non-economic damages. 

Other Factors Determining Non-Economic Damages

It is important to note that the multiplier method is simply a starting point for estimating non-economic damages. Calculating damages is generally more complex and can depend on several other factors, such as:

• The specific injury and type of treatment endured
• Whether the victim had any fault in the accident
• The degree of fault of the responsible party
• The evidence available for proving non-economic damages
• Caps on non-economic damages 

If you suffered a severe injury, attempting to calculate your damages on your own can be extremely complicated. Our personal injury attorneys can help to assess your damages and future damages correctly, so you do not risk accepting a low settlement that potentially leaves you out of pocket in the future. 

Calculating Punitive Damages

No calculation or standard is used to determine punitive damages in a lawsuit. Typically, a judge will decide on the amount by taking into account the actions of the defendant and their financial position. Suppose a multinational corporation is guilty of bringing a defective drug to the market, severely harming one or several consumers. Since punitive damages are supposed to act as a deterrent, the amount awarded to a large and profitable company would be set much higher than the amount awarded to a person guilty of wrongdoing. 

State law can differ markedly on the issue of punitive damages. In some states, punitive damages are unavailable. 

Factors That Could Reduce Your Settlement 

Calculating damages can get complex. Injured individuals should consider working with an attorney to determine the full extent of their losses and expected future losses and protect their legal rights. For example, compensation in a car accident could be adjusted depending on whether the plaintiff had some fault in the crash. Likewise, a victim not following their doctor’s treatment plan may receive a reduced award. Factors that could reduce your settlement can include:

Comparative Negligence

Most states have a comparative negligence law that links a plaintiff’s award to their degree of fault. Therefore, if you are partially to blame for your accident and injuries, your compensation will most likely be reduced by your degree of fault. In some states, plaintiffs that have any percentage of fault, no matter how small, could be unable to recover any compensation at all. 

Failure to Minimize Damages

In most states, plaintiffs must minimize the negative impact of an accident to the best of their ability. An uncooperative who does not follow their doctor’s instructions or fails to return to work when cleared by their doctor could receive a reduced settlement. Some examples of failure to minimize damages can include:

• Not seek prompt medical treatment after suffering an injury
• Failing to follow a doctor’s treatment plan
• Failure to seek alternative employment after losing a job
• Refusing reasonable medical or rehabilitation therapies

A Personal Injury Lawyer Can Protect Your Rights

Failure to mitigate damages can severely reduce the amount of compensation you could receive. Morgan & Morgan does not want this to happen to you. Our experienced and tenacious lawyer can protect you from walking away empty-handed. We want you to receive what you deserve, down to the last cent.