When a car accident occurs, the consequences often extend beyond physical injuries or property damage. Victims may experience significant emotional distress and pain and suffering. These losses are commonly referred to as non-economic damages.
Non-economic damages are intangible and difficult to calculate than economic damages, which are simple to measure using invoices or receipts.
Calculating non-economic damages often requires the expertise of a car accident attorney, as determining a fair and reasonable amount can be complex. These legal professionals usually employ one of the two methods to calculate non-economic damages. They are:
• The multiplier method
• The per diem method
These methods provide a fair assessment of the psychological and emotional costs incurred by the injured party. The sections below discuss more about these methods.
The Multiplier Method
The multiplier method is the most widely used approach in calculating non-economic damages. This approach entails multiplying the overall economic damages—such as lost income, medical bills, or repair costs—by a predetermined figure (the multiplier). Depending on the extent of the injuries and the total effect on the victim’s life, the multiplier usually falls between 1.5 and 5.
For example, if a victim incurs $10,000 in economic damages and experiences severe pain or emotional suffering, the multiplier might be set at 3. In this case, the non-economic damages would amount to $30,000.
Factors influencing the multiplier include the nature of the injuries, the length of recovery, and whether long-term effects, such as permanent disability or psychological trauma, are involved. Insurance companies and attorneys often negotiate the multiplier based on medical documentation, testimony, and the circumstances surrounding the accident.
Experienced attorneys handling serious injury cases recommend maintaining thorough documentation of all medical treatments and personal impacts to support fair multiplier calculations. Presenting clear evidence during negotiations ensures that all immediate and future consequences of the incident are fully considered.
The Per Diem Method
The per diem approach, which gives the victim’s pain and suffering a daily monetary value, is another way to determine non-economic damages. The term “per diem” translates to “per day,” reflecting a daily rate of compensation multiplied by the number of days the victim suffers as a result of the accident.
The victim’s daily income or a fair amount based on the extent of the injuries may be taken into account by the lawyer or the court when determining the daily rate. If a victim makes $150 a day and suffers from discomfort for 100 days, for example, the non-economic damages would be $15,000.
In situations requiring momentary pain, this approach is especially useful because it emphasizes the impact of the accident on the victim’s life.
Final Thoughts
Accurately determining non-economic losses in auto accident lawsuits requires an understanding of these two techniques. The objective is to obtain compensation that accurately represents the accident’s impact on the victim’s well-being, whether through discussions with insurance companies or judicial proceedings.
Both the multiplier and per diem methods have their advantages, and the choice of which to use often depends on the specific circumstances of each case.
It is ultimately the responsibility of a skilled car accident lawyer to help determine the amount of non-economic damages and fight for fair compensation for their clients. They can also represent the victim in court if the insurance company denies fair compensation.
Discover more from LoveBelfast
Subscribe to get the latest posts sent to your email.
