When someone experiences harm or injury, the damages they incur can be categorised into two main types: economic and non-economic.
Economic damages are tangible losses with a clear monetary value, such as medical expenses, lost wages, and property damage. Non-economic damages, on the other hand, are intangible losses that are more difficult to quantify in terms of money.
In this 2023 guide, we will explore what non-economic damages are, examples of such damages, and how they are calculated.
What Are Non-economic Damages?
Non-economic damages do not have a direct monetary value but are related to pain and suffering, emotional distress, and loss of quality of life. These damages are often associated with personal injury cases, like car accidents, medical malpractice, and slip-and-fall accidents.
While economic damages can be calculated using bills and receipts, non-economic damages require a more subjective analysis of the plaintiff’s experience.
Examples of Non-economic Damages
Examples of non-economic damages are emotional distress, pain and troubles, loss of life enjoyment, and loss of consortium.
Pain and suffering is a different type of discomfort suffered from an accident, and this could range from physical to emotional pain the plaintiff experiences due to the injury. On the other hand, emotional distress is the psychological impact that the plaintiff suffers due to the injury, such as anxiety, depression, and post-traumatic stress disorder (PTSD).
Consortium loss is the loss of companionship, love, and intimacy that the plaintiff’s spouse or partner experiences due to the injury. Loss of enjoyment of life is the inability to enjoy life’s pleasures, such as hobbies, social activities, and physical activities, resulting from the injury.
Calculating Non-economic Damages
Calculating non-economic damages is a complex process that requires the analysis of various factors. An essential factor is the severity of the injury and how it has affected the plaintiff’s life.
For example, a person who has lost a limb will likely receive a higher award for non-economic damages than someone who has sustained a minor injury. The injury’s duration is also considered, as long-term injuries will likely result in greater non-economic damages than short-term injuries.
Other factors considered when calculating non-economic damages are the plaintiff’s age, occupation, and overall health before the injury. The plaintiff’s emotional state and coping mechanisms after the injury are also considered.
Sometimes, a jury may consider the defendant’s behaviour when awarding non-economic damages. If the defendant’s reckless or malicious actions, the plaintiff might be awarded greater non-economic damages.
Although it can be challenging to estimate the value of these damages, insurance companies usually use the multiplier or per diem method to estimate the amount. The multiplier method involves multiplying the economic losses by a set number, while the per diem method involves paying the plaintiff a flat rate for each pain day.
Conclusion
Non-economic damages are the intangible losses a plaintiff experiences due to an injury. Calculating them is a complex process that requires the analysis of various factors, such as the severity and duration of the injury, the plaintiff’s age and overall health, and the defendant’s behaviour.
While non-economic damages are difficult to quantify based on how they happen, they provide compensation for the intangible losses that the plaintiff has suffered and are an essential component of personal injury cases.