What are Economic Damages?
If you get injured in an accident, it’s critical to calculate your damages to receive a fair settlement or reasonable jury award.
New York has three types of damages:
- Economic damages, also referred to as special damages.
- Non-economic damages, such as pain and suffering, loss of enjoyment of life, and emotional distress.
- Punitive damages, which are designed to punish the defendant for their conduct. These may be available when the defendant acted with complete disregard for the plaintiff’s well-being.
Unlike many states, there are few limits on the amount of damages a jury may award.
Types of Economic Damages
Economic damages make up your financial losses after an injury. These expenses can be quantified.
Economic damages include:
- Medical expenses, both past and future
- Lost wages, both past and future
- Loss of Earning Capacity
- Property Damage
Past medical expenses and past income losses are easy to prove because there is often direct evidence of these damages. Medical bills provide proof for past medical expenses, and pay stubs provide proof of lost income. It’s important to document and calculate these costs to present them to a jury at trial.
Future medical costs and future lost wages are not as easy to calculate.
Future Medical Costs
These can be difficult to calculate, but an injury victim should be compensated for them all the same. Once you settle or receive a judgment in a personal injury case, you can’t go back to the defendant or court and ask for more.
A medical expert can make a reasonable calculation of future medical costs by examining the necessary remaining treatments for your injury, such as:
- Surgical procedures
- Physical therapy
- Pain relief medications
- Lab tests
- Follow-up medical visits
- Assisted living
- Assistive devices like prosthetics or wheelchairs
- Mental counseling
The medical expert will consider your anticipated medical needs and then take into consideration the escalating costs of healthcare. Finally, they take into account your age, general health before the injury, and the quality of medical care in the community.
Collateral Source Rule
New York follows the collateral source rule. This means that when you’re injured, you can’t receive compensation for expenses that have been paid for by other sources. These other sources include health or disability insurance. Put another way, you can’t be paid twice for the same expense.
For example, assume you get injured on the lake when another boat negligently collides with your own. You suffered a broken leg and tore a knee ligament. Surgery to repair the injuries cost $10,000. At trial, you present the medical bill for $10,000, and the jury awards you that amount.
Under the collateral source rule, the defendant may ask the court for a hearing. At the hearing, the defendant presents evidence that your health insurance paid $6,000 towards the surgery. The court will reduce your award by $4,000 since part of the medical bill was paid by the insurance company, a collateral source.
Loss of Earning Capacity
Loss of earning capacity is also challenging to calculate. These damages usually arise when an injury leaves a person disabled or unable to work in the same way as before the accident.
These damages generally depend on the following factors:
- Age. Were you young with your whole career ahead of you at the time of your injury? Or were you 58 years old with only four years before retirement?
- Type of Industry. What is the trend of the industry you worked in? Was it on the decline, like manufacturing land-line phones, or on the rise, like app development?
- Promotion. Were you in a dead-end job, or were there promotional opportunities on the horizon?
- Diminution in Pension. New York allows a jury to consider how much your pension will be reduced due to a shorter work career.
These factors and more enter into an estimation of lost wages. It takes an expert in these matters to perform this calculation.
You can also receive money for property damages.
Generally, the value of compensation for it is the lesser of the:
- Change in market value before and after the damage occurred; or
- Cost of fixing or replacing.
For example, assume your neighbor Bill comes over with his dog. Bill fails to adequately supervise the dog, and it chews up a cushion on your couch. You just bought it for $800. With a torn cushion, it would now sell for $300. So the change in market value is $500. However, the torn cushion can be repaired for $80. In this case, the property loss would be valued at $80, the lesser of the two figures.
Why a Lawyer is Critical in Estimating Economic Damages
Some damages, like past medical expenses and past lost wages, are amenable to straightforward calculation. Others, like future medical needs and lost income, require the help of experts. For your injury case, you don’t only need our lawyers for their expertise in the law – you also need them because they know the right experts to hire to determine your economic damages and present them to the jury.