Economic vs. Non-Economic Damages: What’s the Difference?

When pursuing a personal injury claim, it’s essential to understand the types of damages you may be entitled to. The compensation awarded in such cases typically falls into two main categories: economic and non-economic damages. Knowing the difference between economic vs. non-economic damages can help you better navigate the legal process. This ensures you receive fair compensation for your losses.

What Are Economic Damages? 

Economic damages refer to compensation awarded for the quantifiable monetary losses that result from an injury. These damages are straightforward to calculate. They are based on actual financial expenditures and losses. Documenting them requires looking at detailed financial records and expert testimony to substantiate claims. Economic damages compensate the injured party for the direct financial impact of their injury. Examples of economic damages include:

• Medical Expenses – These include current medical expenses, such as hospital stays, surgeries, doctor visits, medications, and other immediate medical costs. Additionally, you can seek compensation for expected future medical costs. Some examples are ongoing treatment, rehabilitation, and any future medical care required due to the injury.
• Lost Wages – You can pursue compensation for income lost from the time of injury to the settlement or verdict, as well as for potential earnings lost due to long-term disability or reduced earning capacity.
• Property Damage – Your damages may also cover the costs associated with repairing or replacing damaged property, such as a vehicle in a car accident.
• Out-of-Pocket Expenses – You can recover miscellaneous expenses directly related to the injury, such as transportation costs for medical appointments, through a personal injury claim.

What Are Non-Economic Damages?

Non-economic damages refer to compensation for the more subjective intangible losses resulting from an injury. These damages are not as easily quantifiable as they pertain to the emotional, psychological, and overall life impact of the injury. However, they can be supported by reviewing personal testimonies, psychological evaluations, and comparative case studies. Some examples of non-economic damages include

• Pain and Suffering – This compensation acknowledges the physical pain and discomfort experienced due to the injury.
• Emotional Distress – You can pursue recovery for the psychological impacts, such as anxiety, depression, and trauma resulting from the incident.
• Loss of Enjoyment of Life – You can seek compensation in a personal injury claim for your reduced ability to enjoy daily activities, hobbies, and other life pleasures.
• Loss of Consortium – This compensation acknowledges the loss of companionship, support, and intimacy with a spouse or family member resulting from the accident.

How Are Economic and Non-Economic Damages Calculated?

What is the difference between economic and noneconomic damages? You calculate economic damages based on actual financial losses and require detailed documentation. This includes medical bills, pay stubs, invoices, and receipts. Experts may also be brought in to estimate future expenses and lost earning capacity. The calculation is usually relatively straightforward, as it relies on tangible financial data.

Non-economic damages are more challenging to calculate due to their subjective nature. Various methods are used to estimate these damages:

• Multiplier Method – In this approach, the total economic losses are multiplied (typically 1.5 to 5) to estimate non-economic damages. The multiplier depends on the severity of the injury and its impact on the victim’s life.
• Per Diem Method – This approach assigns a daily rate for pain and suffering. Then, you multiply it by the number of days the victim is expected to suffer from the injury’s effects.
• Comparative Analysis – In some cases, the court will evaluate similar cases and settlements to determine a fair amount for non-economic damages.

The Role of Punitive Damages

Courts award punitive damages in addition to economic and non-economic damages when the defendant’s conduct is particularly egregious or malicious. These damages punish the wrongdoer and deter similar behavior in the future. Unlike compensatory damages, punitive damages do not compensate the victim for specific losses but instead serve as a deterrent.

Some of the types of cases that may involve the awarding of punitive damages include those in which the defendant intentionally caused harm to the plaintiff and those in which the defendant’s reckless behavior showed a blatant disregard for the safety of others.

Is There a Cap on Damages in Missouri?

Some jurisdictions cap the amount of non-economic damages that can be awarded, especially in medical malpractice cases. Missouri, for instance, has a cap on non-economic damages in medical malpractice cases. However, there is no cap on non-economic damages in most personal injury cases. Economic damages, meanwhile, are not usually subject to caps, as they reflect actual financial losses.

Importance of Legal Representation When Calculating Damages

Determining the appropriate amount of compensation for both economic and non-economic damages requires a thorough understanding of legal principles and methods. An experienced personal injury attorney can help navigate these complexities and ensure that all relevant factors are considered. They can effectively gather and present evidence to support both types of damages, negotiate with insurance companies, and advocate for the maximum compensation available under Missouri law.

Contact Goldblatt + Singer for a Consultation with a St. Louis Personal Injury Lawyer

Understanding the distinction between economic and non-economic damages is crucial when pursuing a personal injury claim. Both types of damages play a vital role in helping victims receive full compensation for their injuries and the other losses resulting from an accident. Additionally, punitive damages may be awarded in cases of particularly egregious conduct.

An experienced and knowledgeable St. Louis personal injury lawyer will know what evidence to gather when building your claim to determine the amount of money that would fairly compensate you for your injuries, lost income, pain and suffering, and other losses. If you or a loved one has suffered an injury due to someone else’s negligence, it’s essential to understand your rights and the types of compensation you may be entitled to. At Goldblatt + Singer, our firm has substantial experience handling personal injury cases and is dedicated to helping our clients secure the compensation they deserve. Contact us today at (314) 231-4100 for a free consultation with our team of experienced lawyers.

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