Damage Calculations From 30,000 Feet
In a recent article, I talked about a DUI case where the jury awarded over 1 billion dollars in damages. Of course, anytime I see an award like that I immediately want to know how they calculated the damages. Which made me think that maybe you may also want to know a little bit about how damages are calculated in personal injury cases….you may not, but I need something to write about. So here we go.
There is an old saying in the legal profession that a single lawyer in a small town will starve; however, two lawyers in a small town will make a good living. This adage often comes into play in personal injury cases.
In a case involving injury you will generally have two types of damages. Special damages and General damages.
It is easiest to think of special damages as the amount of money actually lost as a result of the alleged negligence of the other party. This includes things like lost wages and medical bills.
General damages are less quantifiable. They include losses you have endured and may continue to endure. Examples of general damages includes things like pain and emotional distress.
In a “small” case (one without lawyers involved) you may just be dealing with an insurance adjuster. The adjuster will review the matter and documentation supporting your claim and make you an offer. You can accept this offer or counter but eventually you will reach a number that is agreeable to everyone. All without the magic of attorneys. This is why the single lawyer in a small town starves.
On the other hand, if you are involved in a larger case (with 2 attorneys involved) the damages calculation and the settlement negotiations get a bit more involved. You will still have special and general damages. But now you will have something to argue about!
If your claim for damages is large enough you will likely find yourself in negotiations (or possibly litigation) dealing with an attorney for the insurance company. In this scenario, the attorney (and adjuster) will still review all your documentation but will also likely use a personal injury calculator which is, in essence, a computer program designed by insurance companies to help determine a fair assessment of damages. The program takes many factors into consideration including, settlement amounts for similar injuries, geographic location and whether the plaintiff is represented by an attorney.
In contrast, plaintiff’s counsel generally does not use software to help calculate damages. Special damages in a personal injury case are the cornerstone of the case and may include: (1) past and future lost wages; (2) medical bills; (3) out of pocket expenses such as medications; (4) physical therapy; (5) childcare; (6) housekeeping; and (7) loss of personal items. These cost associated with these things are fairly easily determined.
General damages on the other hand are not as quantifiable. In a large personal injury case plaintiff’s counsel will include things such as: (1) emotional distress; (2) anxiety and depression; (3) loss of consortium; (4) loss of ability to concentrate; (5) loss of sleep; (6) extreme mental anguish; and (7) permanent pain or injuries. As you can imagine, there is not an easy way to assign a dollar value to these issues. So placing a dollar value on these damages is a much “softer” process than determining special damages. Regardless, once plaintiff and his/her counsel determine a value for these items the total is by a factor of two or more to determine the general damages amount.
As you can guess, the amount claimed by the plaintiff taking the above factors into consideration and the amount claimed by the insurance company rarely match (ok….never in the history of the world has this occurred. Ever.). At this point the fun begins as the parties began negotiation and trying to convince each other why their calculations are correct. And this, my friends, is where the two lawyers make their living.
Most of the time the parties are able to reach a settlement; however, that is not always the case. If the parties fail to reach an agreement the matter may proceed to the courts where punitive damages may come into play. Quite simply, punitive damages are damages awarded to punish the defendant. With punitive damages things can get crazy and headlines get made.
Brad Klepper, Esq. is President of Interstate Trucker Ltd., a law firm entirely dedicated to legal defense of the nation's commercial drivers. Interstate Trucker represents truck drivers throughout the forty-eight (48) states on both moving and non-moving violations. Brad is also Executive Vice President & General Counsel of Drivers Legal Plan, which allows member drivers access to his firm’s services at greatly discounted rates. Brad spent almost a decade with the largest law firm in Oklahoma where his practice included extensive experience in transactional law, business defense litigation, and intellectual property. In addition, Brad is a licensed architect and serves as General Counsel to the Oklahoma Board of Architects, Landscape Architects and Interior Designers. Brad has dedicated much of his time to DataQs challenges, which are challenges posed to the FMCSA for CSA incidents, to examine data and reports filed by law enforcement.
800-333-DRIVE (3748) or www.interstatetrucker.com