How the amount of recovery in a personal injury lawsuit is calculated is a complex process which oftentimes requires diligent work by legal professionals in order to ensure that the victim receives fair and appropriate compensation for all of their accident-related injuries and losses. As the facts of each case are different, there is no set amount that applies to all cases of a particular type. Instead, each case must be evaluated on its own independent basis.
When someone is injured due to the negligence of another party, determining the appropriate amount of compensation is a critical aspect of the legal process. While it may be impossible to return the accident victim back to their pre-accident condition, these damages are designed to compensate the victim for what they have lost and how their lives have been altered.
But how exactly is this compensation calculated? The process involves a thorough evaluation of a number of different things, including how the accident occurred, the nature and extent of the victim’s injuries, their medical treatment and expenses, their time out of work and lost wages, and more.
The Basics of Personal Injury Compensation
At its center, personal injury compensation is meant to address the losses incurred by an individual who has been harmed due to someone else's improper actions. These losses can be tangible, as is the case with medical bills and lost income, or intangible, such as physical or emotional injuries, pain and suffering.
To see how personal injury compensation is calculated, it's important to first recognize the different types of damages that can be awarded in a personal injury case.
Economic Damages
Economic damages, also known as "special damages," are the most straightforward damages to calculate. These damages represent the financial losses that a victim or their family have experienced as a direct result of their injuries. Common types of economic damages include:
- Medical Expenses: This involves the cost of all medical treatment related to the injury, such as bills for physical therapy, medications, surgeries, hospital stays, and any future medical care that may be necessary. If paid by insurance, these expenses may include deductible or co-payment amounts, as well as any liens that the insurance carrier may assert against your recovery.
- Lost Wages: If the injury has caused the victim to miss time from work, they may be entitled to compensation for the income they would have earned during that time, had the accident not occurred. In cases where the injury results in permanent or long-term disability, compensation may also include the loss of future earning capacity.
- Property Damage: If the incident that caused the injury also resulted in damage to the victim's property (e.g., a car accident), the cost of repairing or replacing the property may be included in the compensation.
At first glance, calculating economic damages may appear to be a fairly straight forward process because it simply involves adding up bills, receipts, lost wages and other documented expenses. The process becomes more complicated, however, when dealing with future economic losses such as future medical treatment and expenses, diminished or lost ability to work, as well as lost wages. In order to properly calculate these amounts, it may be necessary to retain the services of expert witnesses, such as employability specialists and economists.
Non-Economic Damages
Non-economic damages, also known as "general damages," are more challenging to calculate because they represent the intangible losses that a victim has suffered and there is no set amount for these losses. These damages are meant to compensate the victim for the pain, suffering, disability and the loss of enjoyment of life that result from the injuries sustained.
Examples of non-economic damages include:
- Pain: Pain describes how the victim’s injuries feel.
- Suffering: Suffering, on the other hand, concerns how the victim feels about the pain.
- Disability: Disability is how the combination of the victim’s pain, as well as their suffering, affects their life.
- Loss of Enjoyment of Life: Loss of enjoyment of life compensates the victim for their inability to engage in and enjoy the activities of life that they had previously participated in.
- Emotional Distress: Injuries can also have a major impact on a victim's emotional and mental well-being. Compensation for psychological injuries and emotional distress may cover things like anxiety, depression, and loss of life enjoyment.
- Loss of Consortium: If the victim's relationship with their spouse or family has been negatively affected, compensation may be awarded for loss of companionship, affection, or personal relations.
These different categories of damages may be temporary or permanent, and may include what the victim has already gone through, is presently going through, or may be expected to go through in the future. In some cases, such as wrongful death cases, expert witnesses may be retained in order to not only estimate the economic value of these loses, but to also project them over the anticipated course of the victim’s lifetime.
Calculating non-economic damages can be more complicated than calculating economic damages because there is oftentimes no clear monetary value associated with each of these losses. Courts and juries frequently rely on the severity of the injuries sustained, the victim's age, and the impact on their quality of life in order to determine an appropriate amount of compensation.
While attorneys may oftentimes indicate to the jury the correct amount of the victim’s economic losses, in New Jersey, neither the Court nor the attorneys may suggest to the jury the appropriate amount for the victim’s non-economic losses. Instead, that amount must to be determined solely by the jury, based upon their shared life experiences and understanding of how the world works.
What Influences How Personal Injury Compensation Is Calculated
Severity of the Injury
One of the biggest factors in calculating personal injury compensation is the nature, extent and severity of the victim’s injuries. More severe injuries usually result in higher compensation because they involve more extensive medical treatment and expenses, longer recovery times, and a greater impact on the victim's life. This is especially true if the resulting symptoms or limitations are determined to be permanent in nature.
For example, a victim who suffers a serious spinal cord injury, leading to paralysis, is far more likely to receive a higher compensation amount than someone with a more minor injury. That being said, all cases are different and there is no steadfast rule for calculating the amount of damages that any one accident victim is entitled to recover.
Impact on the Victim's Life
The injury's impact on the victim's daily life, as well as the lives of his or her family, is another significant consideration. If the injury has caused the victim to lose the ability to work, partake in hobbies, or maintain personal relationships, these losses will be considered in calculating the amount of compensation awarded.
Personal injury attorneys often work with various medical experts, vocational experts, and economists in order to determine and prove the full extent of these losses and to calculate a fair and appropriate compensation amount.
Degree of Fault
Before determining the amount of damages someone is entitled to, it is often necessary to first decide who was at fault for causing the accident to occur, as well as to what extent. In some personal injury cases, the degree of fault plays a large part in determining the amount of compensation. At fault defendants are said to be “negligent”. If their negligence was a “proximate cause” of the accident, then they may be liable for same. If the victim is likewise found to have been partially at fault for the accident, then they are considered to have been “comparatively negligent”. The amount of compensation awarded to the victim may be reduced by their percentage of fault, or comparative negligent.
For example, if the jury determines that the defendant was 80% at fault and the victim was 20% responsible for the accident, the victim’s recovery will be reduced by the amount of their comparative negligence, 20%. In the State of New Jersey, the injured victim cannot recover if they are found to be more at fault than the defendants. If the victim is more than 50% at fault, then they do not recover.
Insurance Coverage
Insurance coverage may also influence how much the injured victim actually receives, regardless of the amount of the jury verdict. In cases where the negligent party has a limited amount of insurance coverage, or little or no collectible assets, the injured party may be unable to recover the full amount of the damages awarded by the jury. In New Jersey, juries are not told about the existence of liability insurance coverage nor the amount of coverage available. If the damages awarded exceeds the tortfeasor’s insurance policy limits, the victim may need to pursue additional compensation through other means, such as trying to collect the judgement against the liable party or entity individually. Oftentimes, this can be more difficult to do than it first appears.
Jurisdictional Variations
It's important to note that the process of calculating personal injury compensation can be different depending on the jurisdiction in which the case is being heard. Different states have different laws and guidelines regarding personal injury compensation, including caps on non-economic damages and rules regarding comparative fault. While New Jersey is a comparative negligence state, other states may be a contributory negligence state. In a comparative negligence state, the victim’s recovery may be reduced by the amount of their negligence. In a contributory negligence state, victims are unable to recover if they are at fault in any way, no matter what he percentages.
Personal injury attorneys who are well-versed in the laws of their jurisdiction can oftentimes provide you with valuable guidance on what to expect in a particular case.
The Role of Personal Injury Attorneys in Calculating Compensation
Given the complex nature of determining how personal injury compensation is calculated, having an experienced personal injury attorney on your side is imperative. These attorneys play a major role in seeing to it that the victim receives the maximum compensation available by:
- Gathering Evidence: Personal injury attorneys work to gather all relevant evidence to support the victim's claim, including medical records, witness statements, and expert testimony. This evidence is necessary for proving the nature and extent of the victim's damages and maximizing their compensation amount.
- Negotiating with Insurance Companies: Insurance companies will often times attempt to minimize the amount of compensation that they pay out. Personal injury attorneys are skilled negotiators, who can advocate for the victim's rights and work to secure a fair and just settlement.
- Litigating in Court: If an appropriate settlement cannot be reached, personal injury attorneys are prepared to take the case to Court. They will present the evidence and arguments needed to convince a Judge or jury to award the appropriate compensation.
- Calculating Future Losses: In cases involving severe injuries, personal injury attorneys can work with experts in order to calculate future losses, like ongoing medical expenses and lost earning capacity. This helps to guarantee that the victim is appropriately compensated for both current and future damages.
Special Considerations in Premises Liability Cases
Premises liability is a specific area of personal injury law that deals with injuries that occur on someone else's property. These properties may be classified as private or commercial in nature. The duty owed by a property owner to someone who comes onto their property may vary depending on the nature of the property, as well as the status of the person coming onto same. Oftentimes, a higher duty of care is owed by a commercial property owner to a customer than by a private property owners to a social guest. Examples of premises liability cases include falls, construction site accidents, animal attacks, as well as injuries caused by hazardous conditions on the property. When determining how personal injury compensation is calculated in premises liability cases, several unique considerations come into play.
Property Owner's Duty of Care
One of the main considerations in premises liability cases is accurately determining the property owner's duty of care. Commercial property owners oftentimes owe a higher duty of care to their customers than private property owners as these individuals convey a financial benefit upon the owner. Depending on the nature of their ownership of the property, property owners and operators may have a legal obligation to not only inspect the property for potentially hazardous conditions, but to likewise take the steps necessary to either correct the condition or to properly warn visitors about their presence. If a property owner fails to meet this duty of care, they may be held liable for any injuries that occur as a result of their actions or inactions.
Nature of the Hazard
The nature of the hazard that caused the injury is another thing that may influence the amount of compensation awarded in premises liability cases. For example, liability for a fall caused by a wet floor that was not properly marked may result in higher level of negligence than a fall caused by a naturally occurring hazard, such as ice on a sidewalk.
The more egregious the property owner's negligence, the higher their percentage of negligence is likely to be.
Types of Injuries
The nature and extent of the injury sustained in a premises liability case will also affect the compensation amount. Severe injuries, like traumatic brain injuries or fractures, usually result in higher compensation than minor injuries, like cuts or bruises. But even minor injuries can lead to compensation if they result in substantial medical expenses or lost income.
Protecting Your Rights with Levinson Axelrod, P.A.
Knowing how personal injury compensation is calculated is important for anyone who has been injured due to another party's negligence. The process involves evaluating a range of different topics, such as issues of liability, injuries and medical treatment, as well as what to expect in the future. It is imperative that accident victims fully understand these issues, and more, in order to ensure that they receive the full extent of the damages and compensation that they are entitled to. However, this process can be complex and challenging, making it imperative to have skilled legal representation.
At Levinson Axelrod, P.A., we have been fighting for the rights of injury victims in New Jersey for over 80 years. Our team of dedicated personal injury attorneys knows the intricacies of how personal injury compensation is calculated and works tirelessly to secure the best possible outcomes for our clients.
Whether you are dealing with a premises liability case or another type of personal injury claim, we are here to provide the support and guidance you need.
If you or a loved one has been injured, don't try to work through the legal process alone. Call us at (732) 440-3089 or use our online form to reach out today. Let Levinson Axelrod, P.A. help you get the compensation you deserve.