What Are Economic Damages?

What Are Economic Damages?

If you’ve been injured in an accident, you may be worried about how you’ll recover from your injuries and pay your bills.

Fortunately, as the victim, you have the right to sue for damages. 

Exemplary damages are limited to the greater of $200,000 or twice the amount of economic damages plus up to $750,000 in non-economic damages.

In Texas, there are three types of damages:

  • Economic, or special damages.
  • Non-economic, or general damages. These are awarded to compensate the plaintiff for physical pain and suffering, mental pain, emotional anguish, loss of consortium, disfigurement, physical impairment, loss of companionship and society, inconvenience, loss of enjoyment of life, injury to reputation, and others.
  • Exemplary, or punitive damages. These are awarded to punish the defendant for their fraudulent, malicious, or grossly negligent conduct. 

Economic Damages

Economic Damages

These are intended to compensate the plaintiff for actual monetary loss and return the plaintiff to a financial state as if the accident never occurred. They include medical costs, lost wages, lost earning capacity, and property damage.

Past medical costs, lost wages, and property damage are easy to prove with evidence, such as medical bills, paychecks, and property value statements. However, future medical costs, lost income, and lost earning capacity are more difficult. Nevertheless, they can be reasonably estimated and form an essential part of a damage award. Once you’ve settled a case or received a jury award, you can’t later go back to the defendant or the court and ask for more.

Medical Costs

There are two types of medical expenses – past and future. Past costs can be computed based on medical bills.

Future medical expenses are more of a challenge. Indeed, “in order to recover for future medical expenses under Texas law, the plaintiff must show there is a reasonable probability that such medical expenses will be incurred in the future.” The standard practice is to establish them through the testimony of a medical expert.

Once your medical condition has stabilized, the medical expert can calculate a reasonable estimate based on future needs. 

Examples of future medical expenses include:

  • Surgical procedures
  • Physical therapy
  • Pain relief medications
  • Lab tests, X-rays, or MRIs
  • Follow-up medical visits
  • Devices such as wheelchairs or prosthetics
  • Assisted living
  • Counseling.

It’s important to factor in all the anticipated costs above but equally critical to take into account that healthcare costs are continually and rapidly escalating. To estimate the effects of inflation, the expert will take the current costs of the services listed above and factor in inflation. They will also consider your age, health condition before the injury, and medical care in the area where you will receive treatment.

Once future medical expenses are estimated, they are discounted to present value.

Lost Income

There are three types of lost income – past lost wages, future lost wages, and lost earning capacity. 

Past Lost Wages

Past Lost Wages

These are readily calculated. If your salary is $5,500 per month and you were out of work for four months because of your accident, your past lost wages would be $22,000. This can also be aided with your employer’s letter, which states your position, regular working hours and wages, and how much time you missed.

This estimate gets more difficult if you are self-employed and earn a differing amount of money each month. Overtime can also be tricky. Nevertheless, a reasonable estimate should be possible.

Future Lost Wages and Lost Earning Capacity

These future losses are more challenging. They depend on:

Remaining Career Length. Are you 28 with a promising future ahead, or were you planning on retiring right before the accident occurred? 

Industry Outlook. What’s the outlook of the industry you work in? Is it in decline (like selling books in a store)? Or is it an industry expected to expand rapidly (such as app development or elderly healthcare)?

Possibilities for Promotion. Have you reached the upper limits of your career? Or do you work in a position with many raises, bonuses, and promotional opportunities ahead?

All this comes into play when estimating future lost wages and lost earning capacity. An economist can help determine these damages.

Property Damage

Under Texas law, the value of damaged personal property is the difference between the market value immediately prior to the loss and immediately after the loss. 

Why You Need a Personal Injury Lawyer in Estimating Economic Damages

Past medical bills and last wages are easy to calculate. Future medical expenses and future income are not. It will likely be an area of disagreement between the parties in settlement negotiations and at trial. You need an experienced personal injury attorney to guide you through these challenges. You will also need an attorney to hire the right medical experts and economists for you. These experts can make a difference in obtaining compensation for the economic damages you suffered due to the defendant’s negligence.

At Stephens Law Firm, we will stand by your side and will fight to get you the compensation you deserve. All you have to do is call (817) 420-7000, or contact our law office online to see how we can help.