Economic vs. Non-Economic Damages

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Economic vs. Non-Economic Damages

A personal injury award or settlement may include economic or non-economic damages.

What Are Economic Damages?

Economic damages compensate the plaintiff for measurable, real losses. These losses, also called actual losses, often include:

How Are the Economic Damages Calculated?

They are calculated by adding up amounts on receipts, invoices, and medical bills.

Are Economic Damages Always Available in a Personal Injury Lawsuit?

No. In some jurisdictions, a plaintiff may have economic damages reduced or eliminated because they contributed to the injury or were at fault for the injury. 

What Are Non-Economic Damages?

Non-economic damages are damages that are unquantifiable, as they cannot be calculated by simply adding up medical bills or invoices. They include:

Another difference between non-economic and economic damages is that non-economic damages are not out-of-pocket expenses. Thus, non-economic damages are highly subjective and vary case-by-case.

Are Non-economic Damages Always Available in Personal Injury Cases?

No. Their availability depends on the jurisdiction. Some states only allow non-economic damages based on proof of economic damages. Many states also place a cap on these damages.

How Are Non-economic Damages Calculated?

These damages are calculated by a specific formula. The formula’s calculations are usually in proportion to economic damages.

Are There Any Other Restrictions on Non-economic Damages?

Yes, federal law requires non-economic damages to be reasonable. This means they cannot be incredibly high compared to the awarded economic damages. Also, they cannot be awarded for losses that the plaintiff invents or imagines.

Should I Contact an Attorney about Economic and Non-economic Damages?

Yes, non-economic damages are complex and may not be available in every case. You should also talk to a personal injury attorney about proving economic damages too. 

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Last Modified: 10-16-2015 11:10 AM PDT

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