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How Are Compensatory Damages Calculated?

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What Are Compensatory Damages?

When you are injured, you may be eligible for damages. Compensatory damages are the most common form of compensation in a lawsuit. They are awarded to help you recover your financial and emotional losses after an accident, wrongful termination, or other event. However, your level of preparation may impact the value of your compensatory damages.

In a civil lawsuit, compensatory damages cover your out-of-pocket losses and are meant to make you financially whole. They may include:

  • Lost wages and income,
  • Medical bills related to your injury,
  • Repairing or replacing damaged property,
  • The cost of devices and materials needed after your injury (such as wheelchairs, ramps, and prosthetic limbs), and 
  • Job search expenses related to a wrongful termination.

Sometimes, emotional distress, pain, and suffering are also considered compensatory damages. However, different states and laws calculate compensatory damages in different ways. It is important to understand the rules that apply to your claim. A lawyer can help you maximize your claim for damages.

What Types of Claims Involve Compensatory Damages?

Compensatory damages are involved in many civil claims, including:

Depending on your type of claim, you may also be eligible for additional compensation, including punitive damages or liquidated damages

How Are Compensatory Damages Valued?

Your compensatory damages will vary, depending on your age, earning capacity, the severity of your injuries, and your type of legal claim. It is important that you provide your lawyer and the judge with evidence showing your losses. This evidence may include unpaid medical bills, receipts for out-of-pocket expenses, and information about your earning potential. You should also bring evidence showing the emotional impact of your injuries (such as counseling records or statements from family members).

However, some laws (particularly employment laws) cap your compensatory damages. If you need help understanding damage caps and their application to your claim, contact an experienced lawyer for assistance. Other times, you must show that you mitigated your damages. If you unreasonably refused medical treatment or a legitimate job offer, this may also reduce the value of your compensatory damages. 

How Do I Collect Compensatory Damages?

In a lawsuit, you are not guaranteed compensatory damages. Rather, you must prove the elements of your claim and that you have losses related to your injury. If your claim goes to trial, the judge or jury may have wide discretion when awarding compensatory damages. For this reason, it is important to be well-prepared and present compelling evidence.

It is important to present not only your unpaid bills and lost wages to the judge. You also must have evidence that shows the severity of your injuries and their relationship to the lawsuit. Depending on your claim, this may require medical records, independent medical examinations, vocational assessments, and other expert testimony.

Where Can You Find the Right Lawyer?

Calculating damages can be challenging and it can be easy to undervalue a claim. Unless your case is very simple, consider hiring an experienced personal injury lawyer. Additionally, a lawyer may be able to negotiate a settlement, avoiding the risks involved with a civil trial.

Photo of page author Leigh Ebrom

, LegalMatch Legal Writer

Last Modified: 04-18-2018 05:55 PM PDT

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