Understanding the Difference Between Economic and Non-Economic Damages

When someone is injured due to the negligence of another person or party, they may be entitled to compensation for their losses. The process of determining how much compensation a victim should receive involves assessing the types of damages they have suffered. In legal terms, damages fall into two primary categories: economic and non-economic damages.

Understanding the difference between these two types of damages is crucial for both plaintiffs and defendants in personal injury cases. This distinction not only helps determine the overall compensation but also guides the way claims are handled in court.

In this post, we’ll explain the difference between economic and non-economic damages, how each is calculated, and what to expect when seeking compensation in North Carolina.

What Are Economic Damages?

Economic damages are designed to compensate victims for tangible, financial losses they have incurred due to their injuries. These losses can be directly measured and quantified. They are objective, meaning they do not depend on subjective factors like pain or suffering but rather on the actual financial costs of an injury.

Economic damages are usually easier to calculate because they are based on receipts, bills, and other financial documents. With proper documentation, it’s possible to determine the exact financial loss a victim has experienced.

Some common examples of economic damages include:

1. Medical Expenses

The cost of medical care is one of the most significant forms of economic damage. This includes bills for hospital care, EMS transportation, surgeries, physical therapy, prescription medications, and any other treatment related to the injury. Recoverable medical expenses also include those for future care, if necessary, such as ongoing treatments or long-term medical equipment needs.

2. Lost Wages

If an injury prevents a person from working, they may have a claim for compensation on lost wages. This is particularly important for people who are unable to return to work temporarily or permanently due to their injuries. If the injury results in a permanent disability that prevents someone from working, they may also have claims for future lost earnings and a diminished earning capacity.

3. Property Damage

In many personal injury cases, particularly those involving car accidents or slip-and-fall accidents, the victim’s property may be damaged. The cost to repair or replace damaged property is included in economic damages. This may include vehicle repairs or replacing personal belongings like clothing or electronics.

4. Out-of-Pocket Expenses

Victims of personal injury accidents often face other financial burdens, such as transportation costs for medical appointments or the need to hire someone to assist with daily activities. These out-of-pocket expenses are also part of economic damages.

What Are Non-Economic Damages?

Non-economic damages, on the other hand, compensate for losses that are not directly measurable in monetary terms. These damages are subjective and cover the emotional, psychological, and physical toll that an injury takes on an individual’s life. While economic damages cover the financial losses, non-economic damages address the impact the injury has had on the victim’s overall quality of life.

Unlike economic damages, non-economic damages are harder to quantify. Courts may rely on factors such as the severity of the injury, the victim’s quality of life before and after the injury, and testimony from medical professionals or psychological experts to determine an appropriate amount of compensation.

Some common examples of non-economic damages include:

1. Pain and Suffering

This category compensates the victim for the physical and mental pain and suffering they endure because of their injuries. The severity of the pain and how long it lasts is taken into account when determining compensation. Chronic pain, long-term physical discomfort, and significant pain endured during recovery can all contribute to pain and suffering damages.

2. Emotional Distress

Injuries often lead to emotional and psychological suffering. Victims may experience anxiety, depression, PTSD, or other mental health issues because of an accident and its effects on their lives. Emotional distress damages compensate for these injuries.

3. Disfigurement or Permanent Disability

If an injury results in scarring or a permanent disability, the victim may be entitled to compensation for the lasting effects on their appearance and ability to function. The emotional impact of permanent disfigurement can be profound, and non-economic damages aim to address this.

4. Loss of Consortium

This type of non-economic damage compensates the spouse or family members of the injured person for the loss of companionship and intimacy that occurs when an injury affects their relationship. It acknowledges the emotional and relational toll the injury has on family dynamics.

How Are Economic and Non-Economic Damages Calculated?

The process for calculating economic damages is straightforward because they are based on receipts, invoices, pay stubs, and other tangible documents. However, non-economic damages are less concrete and often rely on legal experience and subjective judgment.

In North Carolina, the calculation for non-economic damages often takes into account:

The severity of the injury: The more serious the injury, the higher the potential compensation.
The impact on the victim’s life: How much the injury has affected the victim’s ability to perform daily tasks or enjoy life.
Expert testimony: Medical or psychological experts may provide insights into the long-term consequences of the injury.

Many personal injury cases involve a combination of economic and non-economic damages. Experienced lawyers will present evidence and testimony to support both categories.

How to Pursue Damages After an Injury

To pursue compensation for both economic and non-economic damages, you will need to prove that the other party was at fault for your injury. This can be done by gathering evidence, obtaining medical records, and documenting how the injury has affected your life.

While economic damages are easier to prove, non-economic damages may require more effort and a thorough presentation of the emotional and psychological toll the injury has caused. It’s important to work with an experienced personal injury attorney who can help gather the evidence necessary to support both types of damages.

Conclusion

The distinction between economic and non-economic damages is essential in personal injury cases. Economic damages compensate for tangible losses like medical expenses and lost wages, while non-economic damages cover the emotional, psychological, and permanent impacts of an injury. Understanding both categories of damages can help victims better navigate the process of seeking compensation.

At Ward and Smith, we have experience handling all types of personal injury cases, from straightforward property damage to complex claims involving significant pain and suffering. If you or a loved one has been injured in North Carolina, contact our office today. We’re here to help you understand your rights and fight for the compensation you deserve.