What is Economy? learn more about Economical Damages. What is Economy? learn more about Economical Damages.

What are Economic Damages? 7 Things to Know

An accident can cause significant losses, which include physical, mental, and emotional pain and suffering. A victim may need more than a month to completely recover from such situations. Some individuals may go through permanent impairments that cause suffering and pain for the rest of their lives.

The accident victim faces substantial financial losses during their treatment, and due to the accident, they lose their job. This again backfired on their monetary damages. The insurance company is often responsible for the victim’s injury claim.

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Apart from this, when someone harms you, you can pursue a tort that claims to recover their compensation. While pursuing your claim, you are the entire ‘entity’, which means you will be compensated for all the losses resulting from the defendant’s act. Economic damages are one of those damages where you can claim compensation based on your tort case.

1. What Are Economic Damages?

Economic damages, also known as Pecuniary damages, refer to actual financial losses that you have experienced related to an accident, including future anticipated losses. In Canadian law, it’s called Special damages too which are designed to compensate a plaintiff for actual and quantifiable damages that have incurred or will incur in future for their injury and loss.

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Economic damages can include losses that occur before trial and future losses. Some examples of Economic damages are past-future medical expenses, past and future loss of income, travel expenses, and many more. The measurement is often easy, as you put a particular numeric value because of their tangible losses.

2. What are the Types of Economic Damages?

According to the United Nations Office for Disaster Risk Reduction (UNDRR), there are two types of economic damages. One is direct, and the other is indirect. First, we will talk about the Direct economic damages.

2.1. Direct Economic Damages

According to UNDRR, Direct economic losses usually happen during the event or within the first few hours after the event and, they are often assessed soon after the event to estimate recovery costs and claim insurance payments. There are several forms of Direct economic damage. Some Direct economic damages include almost every personal injury case. Let’s learn them briefly:

i. Medical Expenses

Medical bills make up a large share of most personal injury cases. Treating an injury can be expensive. If someone injures you and you seek treatment, you may face costs for hospitalizations, medications, surgery, physical therapy, and many more. You can claim your resolved and future injury claims from this suit.

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The severity of the injury and the amount of medical care depends on how much medical bills can be recovered. Unless the medical expenses you have been charged are included, the damages are not taxable. Your doctor will prepare your estimated future medical care compensation claim.

Besides, mental health injury cases and their health treatment costs are considered economic damages too. A psychological injury is a genuine injury caused by an accident. The cost to pay for the medical expenses is included in the Economic damages.

ii. Property Damages

When you suffer damage to the road or an object you possess, it will cause you economic losses. When your property is damaged as a result of the Economic damage, you can recover compensation for it.

If you want to replace something irreparably, take the fair price. If you replace it, it will be calculated for the piece. You may receive a payment to repair or replace the damaged property.

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2.2. Indirect Economic Damage

Indirect damages do not occur as an immediate result of an accident but rather because of other damages the victim has incurred. These damages are not directly affected but, are the indirect result of that accident. For instance, lost wages, lost earning capacity, loss of household productivity, and many more.

i. Lost Wages

If your injuries affect your ability to earn a living, you can claim money. In other words, if you lose your job temporarily or permanently, lost earning capacity is included in the economic damage. Lost earnings represent your actual, sustained losses due to the accident.

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Here, you will receive monetary damages, including the actual earnings you earned. Again, your future earning potential for pre- and post-injury will be considered while determining the loss. Past-lost income should be able to be calculated in monetary terms.

The money lost in lost earnings is what you haven’t earned in a long time and will be included. Those who are unable to work or get promoted should consider a reduced salary. It may require skilled occupation expert testimony to obtain a more accurate estimate of such damage.

ii. Out-of-pocket expenses

  • Household services
  • Child care
  • Long-term nursing care
  • Modification of your home or car, and many more.

In personal claims, both direct and indirect damages can fall under compensatory damages, also known as actual damages. Be extra careful while properly preparing for documentation. Ensure you keep Xerox copies of your bills and expenses, as proper recordings are important to recover your compensation. Besides, when suing a defendant for negligence, you can recover Economic damages as well as Non-Economic damages.

3. What Are Non-Economic Damages?

Non-economic damage is an intangible loss that is difficult to measure or estimate in dollars. Non-economic damages typically include pain, suffering, emotional distress, and other mental and psychological reasons.

Even if your relationship with your loved ones has been affected by this injury, it will be considered non-economic damage. In some states, there are caps on non-economic damages, limiting how much compensation you can recover from non-economic damages.

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So, it’s clear that economic damages are tangible and measurable, whereas non-economic damages have less tangible value. Non-economic damages generally include pain, suffering, and emotional or mental distress. Apart from economic and non-economic damages, there is a third type of damage called ‘Punitive damages’.

4. Punitive Damages

Punitive damages, also called exemplary damages, are sums awarded apart from any compensatory or nominal damages, usually because of particularly aggravated misconduct on the part of the defendant. Punitive damages are of ancient origin. Examples can be found in the Code of Hammurabi, the Bible, the laws of the Babylonians, the Hittites, the ancient Greeks, and the Hindu Code of Manu.

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These damages aren’t intended to compensate for actual monetary loss, but, their primary goal is to punish the defendant and resist similar kinds of misconduct in the future. These are awarded for punishment.

5. Are These Damages Easily Available?

Both of these damages are personal injury claims. These claims can only be obtained if valuable and provable pieces of evidence are provided to the court. In the case of economic damages, it’s easily available, as you only need to present the documentation supporting your claim, as mentioned before. Consider maintaining a complete medical record, including a receipt for treatment you paid out of your pocket.

Setting up all the documentation
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On the other hand, in cases of non-economic damages, it’s not as easy because no documents can show exactly how much. Your emotional distress is immeasurable. The legal basis for non-economic damages is often absent from the evidence.

6. What is the Effect of Economic Damage Condition?

If a lawsuit comes against you, you will suffer immediate damage. You can get the receipt for the expenses of the accident immediately. Within a week or two of the accident, you may have to pay the cost of medical expenses, job loss, and property loss if any property (a car accident) is involved. In some situations, your career may be affected.

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Occasionally, the pressure of medical bills may continue throughout your lifetime. You may not know exactly how much you lost in the lawsuit. Even if your current losses are not worth the cost, they are still considered economic damages.

7. Is Hiring a Lawyer Necessary?

Yes, definitely. For both parties, hiring a lawyer is advisable. When you are the victim, the defendant mainly looks at your health and financial losses. It’s an exclusive strategy. They want people to settle down for the minimum price they can. Even these people can bet you on being stunned by the accident. But when you bring a lawyer on board, you will have the power to gain legitimate compensation, and the insurers will likely comply with the rules.

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If a lawsuit is filed against you, a personal injury lawyer can help you understand the damage you are entitled to and relieve you from unnecessary claims. Always contact a qualified injury lawyer for help securing yourself from exploitation.

8. In a Nutshell

Economic damage is not a boon, and this should be avoided as much as it is in our hands. When you are the victim, you will lose your physical health, financial stability, and mental peace. On the other hand, the insurer may also have monetary complications when paying for the victim’s claim.

Thus, such situations are sensitive, so prepare yourself for these incidents. It’s not an uncommon consequence to occur, so take advice from your known people. Don’t forget to communicate your problems with an experienced lawyer.

Last Updated on by rahuldey7417


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