How Is Financial Compensation Figured Out For A Lawsuit?

The goal of a personal injury lawsuit is to recover losses. If someone is injured through the careless actions or inactions of someone else, it’s clear they would not be in this situation if the other party had acted appropriately. Financial compensation or “damages” is a legal mechanism through which a person or group responsible for someone else’s injury makes amends. In this case, the amends comes through financial compensation to help the injured person recover. But how is this exact cost determined? Every injury and situation will be different, so how is the final cost of the damages figured out if a decision is made to sue? Three primary considerations go into the process for any client and lawyer undertaking a personal injury lawsuit.

Economic Damage

This is the first and easiest factor to consider. Economic damage looks entirely at the quantifiable numbers involved in an injury. If a person cannot work for three months due to the medical treatment and recovery process, then three months of lost wages would be a factor. The actual cost of the medical treatment and subsequent medications or physiotherapy required for recovery would be another factor. In other words, economic damage looks at the immediate costs that are involved in the injury and calculate these financial consequences. This is the simplest of the factors to consider.

Non-Economic Damage

This is a more abstract but equally important factor in calculating financial compensation. While medical expenses or lost wages are easy to note and supply a figure for, that’s not the only compensation element. Pain and suffering, for example, have a genuine impact on a person’s life, but this is difficult to put a standardized, objective number to. A person who cannot have normal sexual relations with a partner, for example, will have different pain and suffering from someone who used to play the piano but no longer can. In the same way, someone who was a professional athlete and is paralyzed has not only lost the ability to return to a former occupation but has had the quality of life severely impacted. And while parents losing a child doesn’t necessarily have the same financial impact as the breadwinner of a family dying, there is still a real emotional cost associated with the death of a child.

Punitive Damages

A final and not very common cost is known as punitive damages. Unlike economic and non-economic factors, this type of damage is predicated entirely on punishment. Punitive damages are usually very high to make a public example of the person or group being sued and demand an excessive amount of financial compensation for excessive action. Phillip Morris, the cigarette manufacturer, paid punitive damages in the millions for knowingly suppressing information about how harmful and addictive tobacco and nicotine are. If you’re thinking of going to court to sue a person or group for personal injury, talk to an experienced lawyer in this area. They know how to assess the full extent of damages you are owed and ensure that you either get it in an out-of-court settlement or go to a trial.