How to Value a Personal Injury Case

How Much is a Personal Injury Case Worth?

One of the questions most commonly asked by victims of a personal injury is how a personal injury case should be valued. This question comes up for two reasons: first, because many people try to settle a case outside of court. Accepting a settlement means accepting a set dollar amount of money paid by the insurer/responsible party that is a potential defendant in a court case. The potential plaintiff, in exchange for receiving this set dollar amount, relinquishes all future rights to any other claims arising from the accident. Naturally, before any settlement is agreed upon, an injured party must know what his or her case is worth.

The question also comes up when a person is considering filing a lawsuit, as a very low potential damage award might make the hassle of a trial not worthwhile.

Unfortunately, valuing a personal injury claim isn't as simple as just looking at average settlements or looking at past court cases. While those can be your guide, every situation is different, and your own injuries and damages may be very different from those of others. As such, the absolute best way to value a personal injury claim is to understand how personal injury damages work and why they exist.

Placing a Value on a Personal Injury Claim

When you are placing a value on a personal injury claim, the first and most basic thing to understand is that the purpose of most kinds of personal injury damages is to "make a plaintiff whole." In other words, the damages are designed to make sure that the plaintiff doesn't suffer any uncompensated losses as a result of someone else's negligent wrongdoings or purposefully bad behavior. Damages, then, are designed to compensate the plaintiff for things that were lost because of the accident/injury. This includes actual money that the plaintiff lost, but it also includes more than that. A plaintiff loses enjoyment of life and emotional stability in many cases, suffering both pain and emotional distress as a result of an accident. For a plaintiff to truly be "made whole," these things must be included in any compensation he receives.

Sometimes, someone even loses his or her life as a result of an accident. In such cases, the individual should still be compensated- and special kinds of personal injury damages called wrongful death damages are available in these cases. Further, the losses don't just end with the actual injured victim. His or her family members may suffer a loss too, especially in the event that the person is killed or permanently changed in some way (like becoming brain dead). As such, when placing a value on a personal injury claim, the losses those family members experienced may also be taken into consideration.

Calculating Damages

With the aim of making the plaintiff and/or his family members whole, several different categories have been developed that can help in the valuation of a personal injury claim. These are things that a jury will consider when awarding damages. They are also things that a potential plaintiff should make sure any settlement provides compensation for, since by accepting that settlement, the plaintiff is giving up his right to go to court and collect those damages. The categories include:

The costs of any and all medical treatment made necessary by the accident/injuries.

Obviously, this should include the costs of diagnosing the condition and the costs of all treatment that has been provided to the date of the lawsuit/settlement. However, the plaintiff shouldn't get stuck with future medical bills either. This means that if there is going to be ongoing care required, like adaptive devices, physical therapy, or even round-the-clock nursing care or a nursing home stay, all of these things need to be compensated. This is a form of "economic damage" since here, a plaintiff is receiving money to pay him or her back for actual expenditures that became necessary due to the injuries.

The costs of any and all impact on a person's income.

If a victim misses work because of his or her injuries, or needs to use vacation or sick time, that plaintiff should be paid back for those actual costs. Further, some injuries will affect a person's ability to work in the future. For instance, a plaintiff may not be able to work at all because of the injuries, or may have to take a different "lighter duty" job because the injuries make it impossible for him or her to do the work that was done before the accident. These future lost wages and the impact on earnings should also be compensated. Again, all of these losses make up for actual financial costs, so they are economic damages.

Pain and suffering.

When a person experiences pain and suffering, his lifestyle may be adversely affected. He might not be able to do the activities he did before, and he might experience significant pain on a regular basis. Obviously, he should be compensated for this. Unfortunately, a personal injury settlement cannot take away his pain. Instead, money is paid out to try to make up to him all the suffering he needs to endure. Deciding on a pain and suffering award can be very complicated because it is hard to place a dollar amount on pain. In some cases, this is calculated by looking at a multiple of the actual economic damages (for example, a plaintiff might receive two or three times his economic damages as a pain and suffering award). Using pain multipliers like this is a common practice of insurance companies in settlements.

Emotional distress.

If a plaintiff suffers from emotional repercussions as a result of the accident, like pain and suffering, he should be compensated for this. Again, this is a form of non-economic damages.

Wrongful death.

These damages arise only if a victim is killed by the negligence of a defendant. His or her family members/ his estate will collect these damages. Typically, they include compensation for the past pain and the medical bills of the person who was killed, along with compensation for all income and support lost by the living family members.

Loss of companionship.

A family member of a person who is killed or who loses normal function also suffers a loss. That loss can be compensated through a loss of companionship action.

Some of these damages may not be present in every case, while in others, the vast majority of these categories will apply. All of these categories also create the result that the more serious, life changing and expensive a person's injuries are, and the more of an impact those injuries have on the person and his family, the larger the damage award will be.

Continued: Value of a Personal Injury Case: Page 2