Economic Damages Explained: Personal Injury Law

Personal injury claims have long been a target by conservative groups, the members of which believe that payouts can be exploded by any reasonable margin. More liberal groups believe it’s important to take into account every angle of an accident, and compensate a victim for the defendant’s negligence. What sense do “caps” on claim amounts make if the very function of a lawsuit is to make a person who was injured physically or financially due to another’s negligence financially whole again?

Conservative groups take issue with the many “types” of damage that might be awarded by a personal injury lawsuit, suggesting that a personal injury law firm is almost certain to seek out every type of damage possible even when they don’t make sense based on the facts of a case.

For example, most cases will begin with a firm foundation: Was Party A, the plaintiff, injured because of the negligence of Party B, the defendant. If the answer is a simple “yes,” then great: that means the plaintiff should be awarded for any medical bills they were forced to pay as a result of the accident. And for conservatives, that’s all that needs to be calculated. 

But liberals take it a step further when calculating “economic damages,” which include: past and future medical expenses, past and future lost wages, rehabilitation costs, and diminished earning potential in the future. Liberals often argue in favor of non-economic damages as well, which include pain and suffering, and punitive damages — which a judge might award to punish the gross negligence of the defendant.

The point of these economic damages is that they aren’t necessarily so cut and dry. Many accidents result in permanent damage that might affect quality of life at home or at work. And why shouldn’t a person be fully compensated for bills that might arise because of that accident in the future? Those bills are the defendant’s fault too, aren’t they? The answer is obviously yes.

But conservatives don’t always view it this way because their focus is on business protections over individual protections, and accidents are often caused by negligent businesses — and not negligent individuals hurting other individuals.

Caps to personal injury payments are rare, and most often occur when the negligence was perpetrated by a state or local government that can’t afford to be sued for huge amounts every time a mistake is made. If you’re reading because you think you have a decent personal injury case and wish to sue for economic or non-economic damages, you can always ask for more information from a lawyer who works in the field.

Colorado is one such state where there is a “cap” on certain types of damages. It’s called the “collateral source rule” and generally applies to medical malpractice cases. That’s because many of a plaintiff’s bills will already be covered by insurance, and the law seeks to prevent a plaintiff from seeking two types of compensation to make a profit off of the injury. Such a circumstance can also force a medical facility to pay twice due to liens placed by insurance companies.