Evaluating Personal Injury Cases – A Formula for Damages
Personal injury attorneys often hear the question “What is my case worth?” According to some self-help sources, the formula for the answer is three times the medical bills plus lost income. For example, for $15,000 in medical bills, the case should settle for $45,000 plus lost income. This answer is misleading.
The flaws in the formula are obvious. It is not uncommon for a car accident victim to undergo expensive magnetic resonance imaging and computed tomographic scans that find only minor neck strains, but medical bills from this quick, noninvasive, exploratory procedure can amount to $25,000 or more.
In contrast, an accident victim who suffers a herniated disc that restricts activity for life reasonably may decide not to have back surgery with its high risk of failure. This lifetime injury may cost only a few hundred dollars in medical bills.
Following the formula of three times medicals plus lost income, the claimant with minor strains should settle for $75,000; the claimant disabled or impaired for life should settle for $2,000 to $3,000 plus lost income. Obviously, these results are bizarre.
A More Accurate Method
Evaluation of a personal injury case requires careful consideration of many factors, not just medical bills. Other important factors are the extent of actual treatment beyond diagnostics, duration of the treatment, pain and suffering during the treatment and afterward, potential lost income, and ongoing impacts on quality of life.
Anyone contemplating a personal injury lawsuit may wonder what the case is really worth. To do an estimate, calculate what the injuries have cost monetarily, physically, and mentally and in some cases consider whether the defendant’s misconduct warrants punishment.
Most personal injury damages are compensatory, intended to restore to the injured plaintiff for what was lost by the injury. Compensatory damages make the injured plaintiff whole again monetarily to the extent possible to monetize the consequences of the injury. Compensatory damages for destruction of property and medical bills are not difficult to quantify, but the intangibles of pain and suffering and lost quality of life from physical disabilities and impairments caused by lingering effects of injuries are much harder to evaluate.
Compensatory damages common in personal injury cases:
• Medical Treatment. Personal injury damage awards include the cost of medical care, reimbursement for treatment already administered, and compensation for projected future medical care costs.
• Income. There may be compensation for income already lost and also future income that would be available except for the injury. Damages for lost future income are compensation for loss of earning capacity.
• Property. Destruction or loss of personal property is compensable to reimburse the owner for the fair market value of replacement or repair.
• Pain and Suffering. There may be an entitlement to compensation for immediate and ongoing pain suffered from the injury.
• Emotional Distress. Such damages compensate for psychological harm from fear, anxiety, and sleeplessness. In some states emotional distress is a subset of damages for pain and suffering.
• Loss of Quality of Life. When injuries prevent enjoyment of recreational activity, there may be damages for such deprivation.
• Loss of Consortium. Such damages compensate for the effects of injuries on spousal relationships, the loss of companionship or ability to maintain sexual activity. Some states also allow damages for impacts on parental relationships.
For egregious or outrageous misconduct personal injury plaintiffs may receive punitive in addition to compensatory damages. Punitive damages are to punish the defendant and to deter others from similar irresponsibility. Most states have set limits on punitive damage awards.
Effects of Plaintiff Conduct on Damages
Plaintiff conduct in causation or in the aftermath of injury can diminish the amount of damages recoverable:
• Comparative Negligence. In some states, if as plaintiff is partially at fault for the injury, damage awards measure degrees of fault or liability of both parties. If, for example, the finding is 50-percent responsibility for each party, there is no award of damages to either.
• Contributory Negligence. In a few states, plaintiffs may not be able to recover any compensation if partially at fault for the injury.
• Failure to Mitigate Damages. Plaintiffs must act reasonably to minimize or mitigate the impacts or consequences of an injury. If an injured plaintiff fails to arrange for necessary medical attention and the injury worsens, the worsened condition cannot be part of any award of damages.
To recover full and fair compensation, claimants must be realistic about their settlement potential. Realism means settling claims for their true worth rather than inflating them unreasonably or mistakenly discounting their actual value.