Economic damages versus non-economic damages

When you get into a car accident, bad things happen to you!  The law calls those "bad things" your "damages."  So if someone causes an accident, but nothing bad happens to you, not even a scratch to your car, then you technically have no "damages" because although the accident happened, it did not negatively affect you in any appreciable way.

The law breaks damages down into two general components.  There are "economic" damages (sometimes called "special damages").  Those are measurable damages that include your hospital bills, lost income, property damage to your car, etc.  Just because you have a bill from a doctor doesn't mean the responsible party has to accept that bill as the gospel truth.  For example, if I go to Urgent Care after an accident, and they charge me $500,000 for the visit, the responsible party doesn't have to accept that.  They will likely argue my "economic" damages are unreasonable.  Also, let's say I suffer a minor sprain from an accident but I decide to go to a chiropractor for 12 months at $70/visit.  The per visit charge might be reasonable but the responsible party may challenge the fact I went to the chiropractor for 12 months for a minor accident.  However, that said, economic damages are one facet of damages.

The other facet of damages that is often overlooked by people (and insurance adjusters) is the non-economic part.  This is sometimes called "general damages" or "pain and suffering."  The focus of this type of damage is the EFFECT of the accident on someone's life.  Now, typically there needs to be an appreciable injury for most people (i.e., insurance adjusters and juries) to entertain giving someone compensation for general damages.  If you have a tiny scratch to your bumper, most folks aren't going to give you general damages because they simply won't buy that a scratch to your car had any appreciable "effect" on your life.  However, if you have moderate to severe damage and you have an appreciable injury as a result, then people are generally more open to discussing general damages.

There is a simple story I tell folks to help illustrate the concept of general damages.  Imagine if someone was involved in a moderate accident that totaled their car.  Imagine if that person was hurt and went to the emergency room.  Then that person got treated by doctors, physical therapists, had xrays, etc.  After the person was done treating for his injuries, let's assume his medical bills (economic damages) came to $10,000.  Most people probably wouldn't have too much trouble compensating this man $10,000 for those bills.  They would see that as a reasonable "value" of his case. 

​Perhaps you share that opinion as you read this blog post.  However, what if I told you that this very same man is now in a wheelchair for the rest of his life?  Would you evaluate his case any differently?  Would you feel OK simply valuing his case at $10,000?  Probably not.  Why?  Because now you have information about the EFFECT of the accident on his life.  You would probably want to compensate him a lot more than $10,000 because his non-economic damages are MUCH higher than his economic damages.

While economic damages are easier to assess and evaluate in most cases, it's harder to come up with an appropriate value for non-economic damages.  It's quite subjective.  In most cases, the injured person has a much higher value in mind because they are the ones dealing with the issue every day.  Others may not be as sympathetic.  There is no magic formula.  People have to do their best to be "reasonable" when evaluating non-economic damages.  I always tell juries that they will never be 100% sure the number they come up with is absolutely the correct number.  After all, there is no such thing as the "correct" number.  However, the number has to be "more likely than not" a reasonable number.  That's the standard in civil cases.

The point of this blog post is not to provide you with any kind of formula for non-economic damages. The point of the blog post is to remind the reader that the law generally allows for TWO types of "damages" - economic and non-economic.  The latter is the one that often has the most value and is most often overlooked or undervalued by insurance companies and others.  Just be mindful when approaching any personal injury case of those two components of damages.