Economic damages are the financial losses and expenses from a defendant’s negligent behavior. They are tangible expenses that include items such as medical bills, car repair, pay stubs for lost days at work, and others.
Economic damages are part of a bigger category called compensatory damages. A defendant pays compensatory damages directly or through a claim on their insurance. Compensatory damages are intended to help a personal injury plaintiff make a recovery.
Primary Categories for Compensatory Damages
There are three primary categories of compensatory damages:
- Economic damages can include medical bills, lost wages, reduced or lost earning ability, repair or replacement for damaged property, and life care services.
- Non-economic damages (also called general damages) include pain and suffering, mental anguish, loss of consortium, disability, and disfigurement.
- Punitive damages rarely apply in personal injury cases and are intended to punish the defendant for particularly malicious behavior.
How to Prove the Most Common Economic Damages
Many economic damages are straight-forward and simple to prove. A personal injury lawyer will show economic damages with copies of all injury-related expenses. That is why a plaintiff must keep all bills, receipts, pay stubs, canceled checks, and credit card statements related to the injury.
Calculating a temporary loss of income is simple. For example, if a plaintiff misses ten days of work, multiply a day’s wages by ten. It is more challenging if a plaintiff is permanently disabled and cannot work. This is when an expert may help.
Some Cases Require Specific Economic Damages Calculations
In some instances, a personal injury lawyer may consult an economic damages expert. These are typically accountants with experience in these matters.
An economic damages expert considers such factors as:
- The plaintiff’s age, work experience, education, and projected income path
(including raises, bonuses, benefits, stock, and other economic assets).
- The plaintiff’s financial obligations to a spouse, children, or other dependents.
- Medical and life care costs for a home or a skilled nursing facility.
An economic damages expert will also consider inflation, cost of living, and other related factors.
How to Estimate Replacement for Rare Antiques and Other Expensive Items
Not all economic damages are about lost wages and future earnings. Some cases involve rare and expensive property. For example, the value of a rare vintage car is harder to calculate than a typical automobile. In this example, a personal injury lawyer may consult a certified appraiser.