Economic damages

Definition

Economic damages refer to the monetary compensation awarded to a plaintiff for the actual financial losses they have incurred due to an injury or wrongdoing. This includes quantifiable losses such as medical expenses, lost wages, and property damage. Economic damages are designed to restore the injured party to their financial position before the incident occurred, making them a critical component in personal injury and tort cases.

5 Must Know Facts For Your Next Test

1. Economic damages are typically easier to calculate than non-economic damages because they rely on objective data and receipts.
2. In many legal systems, there is no cap on economic damages, meaning plaintiffs can recover the full amount of their proven losses.
3. The calculation of economic damages often involves expert testimony, especially when determining future lost wages or ongoing medical care costs.
4. Economic damages do not include compensation for pain and suffering, emotional distress, or other subjective losses; those fall under non-economic damages.
5. In some jurisdictions, economic damages may also encompass future expenses related to the injury, including rehabilitation and long-term care costs.

Review Questions

• How do economic damages differ from non-economic damages in legal cases?
  • Economic damages are focused on tangible financial losses that can be calculated and documented, such as medical expenses and lost wages. In contrast, non-economic damages address intangible losses like pain and suffering or emotional distress, which are subjective and harder to quantify. Understanding this distinction is vital for accurately assessing a plaintiff's total compensation after an injury.
• Discuss the role of expert testimony in calculating economic damages in personal injury cases.
  • Expert testimony plays a crucial role in calculating economic damages by providing reliable estimates for future medical expenses, lost earning potential, and other long-term financial impacts of an injury. Experts may include medical professionals who can testify about ongoing treatment needs or economists who can analyze earning capacity. Their insights help ensure that the awarded economic damages accurately reflect the injured party's financial situation both now and in the future.
• Evaluate the implications of capping economic damages in certain jurisdictions on plaintiffs seeking compensation for their injuries.
  • Capping economic damages can significantly impact plaintiffs by limiting their ability to recover the full extent of their financial losses after an injury. Such caps may discourage injured parties from pursuing claims if they feel their true losses won't be adequately compensated. Furthermore, these limitations can disproportionately affect those with severe injuries requiring extensive medical treatment or long-term care, potentially leaving them with substantial out-of-pocket expenses that the capped awards cannot cover.

Related terms

compensatory damages: Compensatory damages are monetary awards intended to compensate a plaintiff for losses suffered, which can include both economic and non-economic damages.

special damages: Special damages are a subset of economic damages that are specific and quantifiable, covering costs like medical bills and lost earnings.

loss of earning capacity: Loss of earning capacity is a form of economic damage that refers to the reduction in a person's ability to earn income due to an injury or disability.