Economic damages are damages that may be awarded as a legal remedy for a plaintiff in a personal injury case. These damages are intended to compensate a plaintiff for their measurable and actual economic losses.
Economic damages awards may cover expenses, such as:
- Compensation for past and future medical expenses;
- Business earnings or opportunities that were lost as a result of the injuries;
- Unauthorized use or damage to property;
- Costs associated with repairs or replacement of property.
For most personal injury claims, economic losses may include, but are not limited to, the following:
- All bills for the medical treatment of the injuries that resulted from the accident at issue in the case, such as:
- Emergency room care and other types of urgent care costs;
- Ambulance services;
- Visits by doctors;
- Medications and prescriptions;
- Physical therapy;
- X-rays and other diagnostic tests;
- Lab work; and
- The cost of traveling to medical appointments;
- Property damage that can readily be ascertained, such as the cost of repairing property or restoring it to the condition it was in before the accident;
- Lost earnings, such as salary or wages, suffered by the plaintiff because they could not work due to their injuries or could not go to work because of appointments for medical treatment;
- Future lost earnings;
- Costs of medical care in the future if the need for it continues beyond the date of the trial;
- The economic loss attributable to permanent disability;
- Measurable business losses, such as lost profits from a trade or business; and
- Loss of business opportunity.
There may also be other costs, such as therapy expenses, rehabilitation, or the cost of medical devices. What is used will vary by case, but the general idea is that economic damages are proven using documents, testimony of individuals with knowledge of the situation, and other evidence.
There are also many cases that will require the testimony of an expert witness who will be able to determine the amount of damages. This is especially true in medical malpractice or wrongful death cases where an expert witness may be required to prove liability, fault, and economic damages.
In a medical malpractice lawsuit, for example, an expert witness in that medical field will most likely be needed in order to show that a physician did not follow the standard of care. A medical expert witness will be able to analyze the complex medical facts of the case to determine if the doctor should be held liable.
How Are Economic Damages Proven?
Economic damages can be proven by examining supporting evidence, such as:
- Receipts;
- Bills;
- Medical documents and other paperwork;
- Invoices, especially for mechanic’s repairs, etc.;
- Fair market value prices; and
- Records from similar personal injury lawsuits.
There are also other forms of evidence that may support an economic damages award. For example, photographs or video evidence of the scene of an accident may help verify the amount of damage involved in a car accident.
The testimony of an expert medical witness can be used to help determine the extent of a physical injury.
How Are Economic Damages Calculated?
Economic damages are calculated based on several factors that should be measurable. For example, a court may examine invoices, receipts, and hospital bills in order to determine the overall cost.
Other types of evidence can also determine economic damages in certain cases, such as a video recording of an accident. Expert witnesses can also be used to help determine the amount of damages.
Are Economic Damages Always Available?
It may not always be possible to recover economic damages. For example, a plaintiff’s damages may be reduced or barred altogether based on the amount of negligence of the plaintiff.
In certain jurisdictions, contributory negligence or comparative negligence may limit or completely eliminate the amount of economic damages a plaintiff may receive. For example, if a plaintiff files a lawsuit after an automobile accident but they were speeding before the accident occurred, their economic damages award will be reduced.
Are There Any Limits to Economic Damages?
Economic damages are usually limited to what is reasonable and proportionate to a plaintiff’s losses. Typically, a court will not impose a limit on economic damages as long as they can be proven and are supported by evidence.
This is different from punitive damages, which are only awarded if the defendant’s conduct is particularly egregious. Many states have limitations on the amount of punitive damages that can be awarded in certain types of cases, such as medical malpractice.
What Are Non-Economic Damages?
It is not possible to measure general damages or non-economic damages. This means that they cannot be calculated by adding up documented receipts and bills.
Damages for not readily quantifiable or non-monetary losses are compensated under general damages. Examples of non-economic damages include:
- The injury itself;
- Emotional distress;
- Disability or disfigurement;
- Pain and suffering;
- Physical impairment;
- Loss of companionship;
- Loss related to the plaintiff’s reputation; or
- Loss of enjoyment of life.
The amount of damages is highly subjective and may vary by case. In addition, because they are, by nature, difficult to calculate, each jurisdiction has its own guidelines.
In some states, non-economic damages can only be awarded upon proof of economic damages. Additionally, statutory caps are often imposed on these damages, which are calculated according to a specific formula that is based on economic damages.
Non-economic damages may be subject to certain federal limits. Federal laws require that this category of damages be reasonable.
These damages cannot be excessively high as compared to the economic damages that are awarded. This means that an individual cannot be awarded more for their emotional distress than they were for their loss in earnings.
In the case of a minor vehicle accident, if the economic damages are $10,000, an individual will likely not receive more than $100,000 in non-economic damages. Usually, non-economic damages are not allowed to exceed ten times the amount of economic damages.
Non-economic damages will not be awarded for purely imaginary issues or issues invented by the plaintiff. Additionally, there is a greater chance of damages being awarded if the injury has physically manifested.
Examples of physical manifestations of stress associated with an incident may include:
- PTSD
- Physical disfigurement
- Stomach ulcers
What Is the Difference Between Economic vs. Non-Economic Damages?
Personal injury is the legal term for an injury to the body, mind, or emotions instead of damage or injury to property. As discussed above, damages awarded in a personal injury case may include economic or non-economic damages.
Economic damages are objectively verifiable, measurable, and real losses. Non-economic damages, on the other hand, are subjective, unquantifiable losses.
Individuals who have suffered injury as a result of substandard healthcare, have been severely disabled due to a healthcare injury, or have been injured in traffic accidents may be entitled to economic damages.
In addition, non-economic damages may be awarded for losses caused by substandard healthcare or a motor vehicle accident. These damages are capped and are also monitored carefully to prevent them from becoming excessive.
Should I Hire a Lawyer to Help with Economic Damages?
You may have been injured as a result of an accident, medical malpractice, or other issue. If so, your personal injury attorney can help you recover damages to compensate you for your injuries. Your lawyer can help you calculate the total amount of damages you may be able to receive.
It is important to be aware that your insurance company will likely calculate your damages and will try to award you what they think is fair. In some situations, however, your insurance company may try to settle for a lower amount than you should receive.
Your lawyer can inform you of your rights and legal options, help you understand the law and what you might be entitled to, and represent you in court if necessary. In addition, your lawyer can help negotiate with your insurance company and the defendant if you decide to settle your case outside of court.
