Economic Damages

Where You Need a Lawyer:

(This may not be the same place you live)

At No Cost! 

 What Are Economic Damages?

Economic damages may be awarded as part of the legal remedy for the plaintiff in a personal injury case.

Economic damages are meant to compensate the plaintiff for their actual, measurable economic losses.

Economic damages awards may include expenses such as:

  • (Past and future) compensation for medical expenses
  • Business opportunities or earnings lost as a result of injuries
  • Unauthorized use or damage to property
  • Costs associated with repairs or replacement of property

In most personal injury cases, the bulk of the damages award takes the form of medical expenses (i.e., hospital bills, therapy costs, cost of medication, etc.). Personal injury cases may involve more property costs (such as car accidents involving severe damage to the car).

Hospital bills, therapy costs for emotional/mental issues caused by the injury, medication costs, ambulance bills, etc., comprise the bulk of damages awarded in personal injury cases.

Pharmacy receipts, hospital invoices, and other medical bills are added together to calculate economic damages. Invoices for damages to your motor vehicle may also be considered, but all evidence must be measurable.

Additionally, many cases require the testimony of an expert witness who will be able to determine damage amounts. Especially in wrongful death or malpractice cases, expert witnesses are required to prove liability, fault, and economic damages.

For example, in a medical malpractice lawsuit, an expert witness in that medical field will almost always be needed in order to demonstrate that the physician did not follow the standard of care. A medical expert witness can analyze the complex medical facts of the case to determine if the physician should be held liable.

It is not always possible to recover economic damages in personal injury lawsuits. Some jurisdictions state that contributory negligence or comparative negligence may limit or entirely reduce the amount of economic damages a plaintiff may receive.

Consequently, in many states, if a plaintiff sues after a car accident but was speeding before the accident, their awarded economic damages will be reduced.

How Are Economic Damages Proven?

A number of supporting evidence can be used to prove economic damages, including:

  • Receipts
  • Bills
  • Medical documents and other paperwork
  • Invoices (especially for mechanic’s repairs, etc.)
  • Fair market value prices
  • Records from similar personal injury lawsuits

Other forms of evidence can also support economic damages awards. For instance, video footage or photographs of the scene of an accident can help verify the amount of damage involved in a car accident. The testimony of an expert medical witness can also help determine the extent of a physical injury.

How Are Economic Damages Calculated?

The calculation of economic damages is often based on several factors that should be measurable. The court may examine receipts, invoices, and hospital bills to determine the overall cost.

Damages may be determined by other evidence in some cases. This type of evidence can include a video recording of an accident. In addition, an expert witness can help determine the amount of damages in many cases.

Are Economic Damages Always Available?

It is not always possible to recover economic damages. For instance, some jurisdictions may limit the plaintiff’s recovery amount under contributory negligence or comparative negligence rules.

The plaintiff’s damages may be reduced (or sometimes barred altogether) based on the amount of negligence on their part. A plaintiff who sues in relation to a car accident is an example of this. An economic damages award may be affected if the plaintiff sped before the accident.

Are There Any Limits to Economic Damages?

Economic damages are typically limited to what is reasonable and proportionate to the plaintiff’s losses. As long as economic damages can be proven and supported by evidence, courts don’t usually impose limits on them.

In contrast, punitive damages or medical malpractice damages are other types of damages.

Strict formulas and calculations often limit damages of this type. It is important to note that each state will have its own method for calculating damages, whether economic or other types of damages.

What Are Non-Economic Damages?

It is impossible to measure non-economic damages or “general” damages. In other words, they cannot be calculated by adding up documented bills and receipts. Damages for nonmonetary, not readily quantifiable losses are compensated under these general damages.

Non-economic damages include:

  • The injury itself;
  • Emotional distress;
  • Disability or disfigurement;
  • Pain and suffering;
  • Physical impairment;
  • Loss of companionship;
  • Loss related to the plaintiff’s reputation; or
  • Loss of enjoyment of life.

Damages are highly subjective and vary from case to case. Additionally, since they are difficult to calculate by nature, each jurisdiction sets its own guidelines.

Some states will only allow non-economic damages upon proof of economic damages. In addition, statutory caps are generally imposed on these damages, which are calculated according to a specific formula based on economic damages.

Non-economic damages are subject to certain federal limits. Federal law requires that these damages be reasonable. They cannot be excessively high in comparison to the economic damages awarded. As a result, you cannot be awarded more for emotional distress than you lost in earnings.

In the case of a motor vehicle collision, if your economic damages are $10,000, you will likely not receive more than $100,000 in non-economic damages. Typically, non-economic damages cannot exceed ten times the amount of economic damages.

Non-economic damages will not be awarded for purely imaginary damages or those invented by the plaintiff. In addition, there is a greater chance of damages being awarded if the injury is physically manifested. PTSD, physical disfigurement, or stomach ulcers can result from stress associated with the incident.

What Is the Difference Between Economic vs. Non-Economic Damages?

Personal injury is the legal term for an injury to the body, mind, or emotions rather than damage or injury to property. Damages awarded as part of a personal injury award may include economic or non-economic damages.

The definition of economic damages is measurable, objectively verifiable, and real losses, while non-economic damages are subjective, unquantifiable losses. Those who have suffered from substandard healthcare, have been severely disabled due to a healthcare injury, or have been injured in traffic accidents may be entitled to economic damages.

Additionally, non-economic damages can be awarded for losses caused by substandard healthcare or a motor vehicle accident. Still, these are capped and monitored carefully to prevent them from becoming excessive.

Should I Hire a Lawyer to Help with Economic Damages?

A personal injury attorney can assist you in recovering damages and calculating your total damages if you have been injured. In personal injury lawsuits, damages are generally awarded regardless of whether they are economic or not. An insurance company will calculate your damages and try to award you what they believe is fair.

An insurance company’s valuation of your damages is usually incorrect. A qualified and knowledgeable personal injury attorney will inform you of your rights and legal options, help you understand the law and what you might be entitled to, and represent you in court if necessary.

In personal injury cases, economic damages are an important factor. You may need to hire a personal injury lawyer if you have any questions or inquiries regarding economic damages. A lawyer can advise you on your legal rights and inform you of local laws. Your lawyer can also represent you during a trial if you need to file a lawsuit.

Law Library Disclaimer


16 people have successfully posted their cases

Find a Lawyer