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What are economic damages in a personal injury case?

Damages as we talk about them in everyday conversation and the way they are used in the law are not the same thing. While your car can be damaged by a shopping cart, in that it’s condition is altered in a way that makes it less functional or less beautiful than an undamaged car, when a lawyer speaks of damages, what they are really talking about is money.

Damages, in the legal sense, are the monetary value of a loss that someone suffers due to another person’s carelessness. While it may strike some as crass to discuss money so blatantly, it is the main tool at the disposal of our civil justice system. After all, if someone negligently causes you to lose your leg, a court can’t order that person to return your leg to you, which means the choice is between either providing victims with money for their loss, or deciding as a community that the person who caused the accident doesn’t have any responsibility for their actions.

Economic and non-economic are the two main categories of damages. An easy way to understand the difference between the two types of damages is that economic damages can be priced in the marketplace, whereas non-economic damages have no outside pricing mechanism. For instance, the income that mother or father brings into their home is something that can be determined by the market; The value of having a mother or father isn’t something we can price that way.

In this article, Texas personal injury attorney Michael Grossman will discuss economic damages, covering what they are and how they work.


Questions Answered on This Page:

  • What are economic damages?
  • What are the different types of economic damages?
  • How do economic damages differ from non-economic damages?

What kinds of Economic damages are recoverable under Texas law?

We’ve all heard the expression, “You break it, you buy it.” The assumption in this statement is that if we’re out in a store, looking over a merchant’s goods, their property, if we damage it, then we have an obligation to replace the value of that item. One way of looking at personal injury law is as how we apply this principle when what is “broken” in the accident isn’t a thing, but a person.

Any accident imposes a financial burden on its victim. This burden can range from massive hospital bills to an inability to make a living. The purpose of a personal injury lawsuit is to hold a careless or negligent person accountable for their actions, by ensuring that they, not the victim bear the costs of dangerous behavior.

Of course, none of this answers the question, “What are economic damages?” Economic damages generally fall into three broad categories that include:

  • Medical Expenses (past and future) – Sustaining even a minor injury can be quite expensive these days. This category of damages allows victims to recover the cost of the medical care that they receive related to the accident. It might be confusing to some that it is divided into past medical expenses and future medical expenses, but the reason for not lumping all expenses together into one type of damages makes sense when you think about it. Past medical expenses are the costs that a victim incurs following an accident, while future medical expenses are the cost of treating the victim going forward. The difference between the two is that one can easily demonstrate past medical expenses with hospital bills and receipts, whereas future medical expenses are more speculative in nature, having to account for likely treatments as well as what those treatments will cost in the future, which is why they are treated separately.

  • Lost of Earning Capacity (past and future) – This category of damages is quite similar to medical expenses, in that it breaks down into two sub-categories, past and future. Obviously, many people are unable to work after an accident. If we let the person who injured them off the hook by just picking up the hospital bills, then a victim would still be stuck paying for their own injury if they were unable to work. That’s why the law permits the injured to recover the amount of money that they lost before the trial. At the same time, if an injury is severe enough, it can impact a person’s ability to earn a living into the future. For this reason, victim’s can also pursue a loss of future earning capacity claim, to cover the difference of what they expect to make in the future and what they would have been expected to make if that accident hadn’t happened.
  • Loss of Household Services – This subcategory of economic damages may surprise people. What are household services? Essentially, they are the chores that we all take for granted around our homes. They can include, cutting the grass, making dinner, cleaning, and anything else around that home that would conceivably cost money to have someone else do the same task. Simply put, if the injured person has the responsibility for cutting the grass, and their injury prevents them from doing so, part of their loss in the accident is paying someone else to do that task. This may strike some as petty, but it ensures that those who contribute to their family around the house aren’t treated worse by the courts than those who help the household by earning income outside of the home.

Economic damage go many names, such as compensatory, actual, or pecuniary damages. Whatever we call them, the purpose of economic damages is to ensure that it is the negligent person who pays for an accident, not the victim.

How Do I Get Economic Damages for My Injuries?

There are two aspects that are crucial for a victim’s ability to recover economic damages. First, they have to prove, in court, that the actions of another person make them responsible the injuries that occurred, and the plaintiff also has to demonstrate to a jury evidence which convincingly establishes the value of their economic damages.

Establishing the defendant’s liability is a matter of trial strategy and a whole issue unto itself. Proving damages has its own challenges. Some people may think it’s as simple as showing up at the court house with a box of bills and receipts and having them admitted into evidence. Of course, courts don’t work like that.

In order to have a document, like a bill, admitted into evidence, a court has to have confidence in the document’s authenticity. Without some safeguards, it would be far to easy for a person to make fake invoices on their computer and print them out. That’s why documents, such as bills, need to be “proved up,” before they ever make it in front of a jury. The “proving up” process involves getting documents from their original source directly into the hands of an officer of the court (an attorney). These documents have to be accompanied by an affidavit from the custodian of those records, which indicates that the documents that are coming from their company are genuine.

This may sound like a bunch of technicalities and legal mumbo-jumbo, but the stark reality is that a plaintiff can have the person who injured them dead to rights when it comes to matters of liability, but there won’t be anything to recover if evidence of damages isn’t allowed to be shown to the jury.

Similarly, there are many kinds of economic damages that an attorney is simply not qualified to answer. For instance, if we wanted to know how the earnings of a person who lost their leg would be impacted over their working career, neither the victim nor their attorney have the required skills to properly and convincingly answer that question. Similarly, victims and attorneys cannot formulate a proper life-care plan that accounts for a victims, sometimes life-long, medical needs.

In these situations, it is necessary to bring in qualified experts whose technical knowledge the court and juries rely upon when determining a fair value for a victim’s injuries. Qualified expert witnesses can include:

  • Doctors
  • Engineers
  • Certified Life Planners
  • Economists
  • Neurosurgeons
  • Toxicologists
  • Psychologists
  • Vocational Rehab Counselors
  • Medical Examiners
  • Architects

For instance, if someone was hurt when they slipped on a spill while attending a football game, and was seriously hurt, they might have a personal injury case against the owner of the stadium and possibly the worker who caused the spill. In deciding how much their damages are worth, an attorney may consult with an expert physician and review the relevant medical bills, analyze the injured person’s employment records to see how much work they’ve missed, and consult with an expert economist. Experienced attorneys, like those at Grossman Law Offices, often have our own in-house investigation team to help in this pursuit, and a stable of industry-leading experts who can clearly explain a person’s damages to the jury.

In the end, the amount of economic damages available to an injury victim depends greatly on the ability to make a clear, compelling case to a jury, which meticulously documents the validity of the losses that were suffered. While everyone loves to read a newspaper article and instantly assign blame for a calamity, an experienced attorney knows that truly holding a wrong-doer accountable is a meticulous process of covering all of the bases.

Not a Moment to Waste The importance of a prompt investigation...Read More >

Experience is the Difference at Grossman Law Offices

For over a quarter of a century, our law firm has successfully handled thousands of personal injury cases. In that time, we’ve developed a different approach than many other law firms. Whereas a lot of attorneys will take on a bunch of cases and settle them as quickly as possible in order to maximize their firm’s revenue, we understand that for most people, their personal injury case is the most important legal case of their lives. It deserves to be treated as such.

We know that many people aren’t interested in knowing so much about how damages work, and most attorneys would agree. However, our view of litigation is that it is a partnership between the client and our firm. The client has the injury and calls the shot, while we have the legal acumen to help maximize the potential for success in their case. All of this is to say that we believe an informed client makes for a better partner throughout the process. That’s why we don’t just say, “Economic damages? That’s really technical and you don’t need to know about that.” That’s also why we have a live person who is always ready the answer the phone, 24 hours a day, 365 days a year.


Other articles about personal injury cases that may be helpful:

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