Economic Damages

A plaintiff suing for negligence will have to prove the defendant’s duty to the plaintiff, the defendant’s breach of duty, actual and proximate cause, and damages. If any of these elements is missing, the defendant will be able to defeat the plaintiff’s lawsuit. However, a personal injury plaintiff who can prove a defendant’s negligence can potentially recover all compensatory damages needed to make him or her “whole.”

These compensatory damages may be “economic” or “noneconomic.” Economic damages are tangible damages that can easily be quantified, and their value does not change depending on the jury that is evaluating them.

Economic damages may include past and future medical expenses, past and future lost wages, household services, vocational rehabilitation, property damages, out-of-pocket expenses, and lost earning capacity. Medical expenses are bills that arise out of the injuries that are caused by the accident. Often, an appellate court will look at the total amount of medical expenses in order to determine whether an overall award of damages is reasonable. For example, if a judge improperly admits evidence that is more inflammatory than probative, resulting in the unusual verdict of $1 million in a soft tissue injury case, the court might look at the medical bills to determine whether the damages award was reasonable.

Future medical expenses are permitted when a plaintiff can sufficiently prove he or she will need further medical care due to an accident. Usually, this item of damages must be proved through expert testimony given by a plaintiff’s treating physician.

Lost earning capacity can be recovered in catastrophic injury cases when a plaintiff proves that his or her ability to earn money has been impaired or diminished by the injuries. Like future medical care, it is usually necessary to present expert testimony on this point. The expert will consider the plaintiff’s age, health, life expectancy, talents, past earning capacity, and training in determining whether there is lost earning capacity. For example, if a supermodel is disfigured and suffers brain damage in a truck accident, she may no longer be able to model or acquire training to get a different type of job. Lost earning capacity could be evaluated.

Household services include any costs to hire somebody to do things around the house while a victim is recuperating. A key aspect of household services is that they have to be for services for which the plaintiff wouldn’t have incurred expenses if he or she hadn’t gotten hurt. A plaintiff cannot recover the costs of a housekeeper, for example, if the housekeeper’s wages were already part of the household budget.

In most states, there is no cap on economic damages, and a plaintiff who successfully proves liability will be able to recover a full spectrum of the economic damages he or she can prove. However, in some states, such as Colorado, there is an umbrella cap that limits all of the medical malpractice damages that can be awarded to a plaintiff.

The “collateral source rule” is a rule that traditionally affected the recovery of economic damages. Often, a plaintiff’s medical bills are covered by his or her own medical insurance. The collateral source rule prevented a defendant from showing the jury that the plaintiff received compensation from some other source. The goal of the rule was to prevent the defendant from getting a windfall when it was liable for the damages, since an insurance company often places a lien on the amount that the plaintiff is awarded in the amount of damages for which the insurer has compensated the plaintiff. In some states, the collateral source rule has been modified in medical malpractice or personal injury cases such that it only applies when the insurer has claimed a subrogation right, but not in other cases.