How is compensation calculated for pain and suffering?
August 5, 2021
When we work with clients to either settle a personal injury claim or build a case to take to the Georgia courts, one of the most complicated damages to calculate is “pain and suffering.” This seemingly-abstract, but very real impact on our clients’ lives is a central issue that must be represented and compensated. However, trying to place a dollar value on this type of damage can be overwhelming for the inexperienced — and an easy one for an insurance adjuster to shoot down when working directly with a claimant.
One of the biggest benefits of working with a personal injury attorney is the fact that you will not need to worry about quantifying your pain and suffering, calculating a fair dollar amount for it, and then defending your calculations through negotiations. This process can understandably feel nearly impossible for someone who is suffering from the impacts of a serious accident, and insurance companies take advantage of this fact as they push towards a low settlement as quickly as possible.
At The Pendergrass Law Firm, we focus on getting our clients the money they deserve while they take the time to focus on their recovery. You won’t need to worry about the finer points of how we calculate your pain and suffering, but you can learn more about some of the ways an attorney will reach a final calculation below. Keep in mind that no two personal injury cases are alike, so your attorney will take a unique approach to your situation in order to reach a figure that adequately compensates you for your pain and suffering — as well as the numerous other non-economic damages that a personal injury victim typically endures after a serious accident.
What Are Damages?
Before getting into the details of how pain and suffering are calculated, it can be helpful to understand what non-economic damages are and why these damages are included in personal injury claims. Personal injury claims are designed to seek compensation for damages, which are the impacts of an accident.
A tort claim focuses on recovering compensatory damages, which are meant to repay a victim for measurable losses. There are instances where a judge or jury awards a personal injury victim punitive damages, but these damages are intended to punish the at-fault party, not specifically compensate the victim, so your attorney will not request these types of damages. If your lawyer believes that your situation may warrant punitive damages, they may decide to forgo direct negotiations and instead move straight to a lawsuit so a judge and jury can hear the case.
Economic damages are at the core of a personal injury case and must be discussed to better understand non-economic damages and the methods of calculating non-economic damages. An economic damage is any impact of an accident that has a measurable dollar value, meaning that there is an easily calculated amount of money it will take to compensate the victim.
The most common economic damages in a personal injury case are medical bills and related costs, as well as lost wages and other impacts to a victim’s income, both current and in the future. There are many other economic damages following an accident. Your attorney must pay close attention to detail when going through the many impacts you have experienced as a victim. Even something as minor as an over-the-counter painkiller or an Uber ride to the grocery store can be included in your economic damages. That is, if you needed the ride because you couldn’t drive yourself after your injuries, or the painkiller was to help alleviate the symptoms of your injuries.
You will learn the importance of including every single economic damage in your calculations, because your non-economic damages may be anywhere between 1x and 5x the dollar amount of your economic damages. This means that every $1 that you overlook while calculating economic damages may equate to upwards of $5 that you do not receive back for non-economic damages or a total loss of $6. Therefore, no detail is too small to ignore when calculating compensatory damages.
Simply put, non-economic damage is any impact that you experience following an accident that does not have a measurable dollar value associated with it. As opposed to economic damages, these impacts do not come with invoices, bills, income statements, receipts, or tangible methods to measure them. Determining the total cost of your medical care requires gathering all of the different invoices and bills, but how do you put a price tag on something as abstract and subjective as “depression” after you have experienced a significant decline in your quality of life after an accident?
As you can imagine, insurance adjusters find it much easier to push back on a figure relating to non-economic damage versus economic damage. This is one reason why many victims ultimately settle their personal injury claims for far less than what they are owed. Insurance companies leverage a claimant’s inexperience (as well as their compromised situation as they deal with their injuries and fallout from the accident) by aggressively rejecting non-economic damage calculations and forcing an ongoing negotiation. Fortunately, your personal injury attorney will handle this process on your behalf.
How is Pain and Suffering Calculated After a Personal Injury?
A personal injury attorney may use a number of methods when assigning a dollar value to non-economic damage like pain and suffering. However, “pain and suffering” is just one line item out of many damages that go into quantifying the sum total of non-economic damages that a victim is owed. The following methods will give you a better sense of how pain and suffering is calculated, as well as how the entire subcategory of non-economic damages is calculated.
The following are two of the most common methods of calculating non-economic damages:
The Multiplier Non-Economic Damage Calculation Method
Using the multiplier method to calculate non-economic damages first requires that the victim and their attorney quantify the extent of these damages on a scale between 1.5 and 5. To do this, you and your attorney will go through your injuries and determine how severe they are, as well as how intense the pain and suffering is that you must endure. The more severe your injuries, the higher multiple they will be assigned. Beyond your injuries, there are additional impacts such as emotional trauma, loss of enjoyment in your daily life, depression, anxiety, and more. Each of these factors will be considered, and a multiple assigned to each.
Once your attorney has assigned a value to each of these impacts, the average will then be taken as your final multiple. For this example, we will use a multiple of 3x, which falls squarely in the center between “minor” and “most severe” non-economic damages.
In order to determine a final value for your non-economic damages, such as pain and suffering, your attorney will also need a final amount of economic damages because this is the dollar value that you will be applying to your multiple. For the sake of this example, let’s assume that your economic damages total $100,000. Your 3x multiple will therefore yield a total of $300,000 in non-economic damages and another $100,000 for your economic damages for a total sum of $400,000.
The Per Diem Non-Economic Damage Calculation Method
In this method, there is a lot less emphasis on quantifying the extent of each individual non-economic damage and more on determining a fair amount of money to compensate the victim for each day they have endured these damages. This is a particularly effective method in situations where the victim may not actually suffer a significant economic impact, such as a retiree who does not have any income that is impacted regardless of the severity of their injuries.
Using the per diem method, you and your lawyer will work out a daily rate for each day you endured the non-economic damages. You may earn $200 a day (before your accident), and this could be used as an easy way to justify assigning a $200/day rate. However, if you are not currently in the workforce or there are other factors at play, your attorney may use other indicators to determine the amount that makes sense for your per diem. Regardless, once the rate is set, you will then work to determine the number of days that these non-economic damages will impact your life.
If a 45-year old male suffers a serious injury in an accident and their yearly income at the time of the accident is $85,000, then the daily rate would equal $232.88. If they ultimately suffer from the effects of their injuries for two full years, or 730 days, then the per diem method would work out to just over $170,000. If the injuries were permanent, their attorney would need to calculate a long-term projection for these impacts and determine how many days they would include in their final calculations.
Which Calculation Is Right For You?
Determining which method to calculate non-economic damages is a very specific question that varies on a case-by-case basis. Contact our law firm as soon as possible to speak with an attorney about your situation and to start working on calculating all of the damages you have suffered.