Are you wondering what non-pecuniary damages are? If you are injured in an accident caused by another person, you may be able to recover damages from the at-fault party. The primary purpose of the compensation is to put you back in the position you would be in had the accident never happened.

It means that you can recover compensation for both pecuniary (economic) and non-pecuniary (non-economic) damages. But what are these two types of losses? And how do they differ from each other? Let us find out.

What Are Pecuniary Losses?

Pecuniary losses are economic losses that have a specific monetary value attached to them. In other words, these are the out-of-pocket expenses you have incurred or will incur in the future as a result of the accident. Typically, pecuniary losses include:

Medical bills
Lost wages, if you are unable to work or are working reduced hours
Loss of future earning potential due to disability or impairment
Other expenses such as transportation costs related to medical treatment and recovery
Car repair costs
Emergency room bill
Rehabilitation expenses
Nursing home care costs
Physical therapy bills

Basically, any expense directly linked to the accident and is quantifiable in monetary terms can be categorized as a pecuniary loss.

How Are Pecuniary Damages Calculated?

It is relatively easy to calculate your pecuniary damages as they usually consist of bills, receipts, and other documentation. You can use this documentation to calculate your actual losses by adding up the expenses associated with each type of loss.

For instance, if you have medical bills totalling $5,000, lost wages of $2,000, and car repair expenses of $1,000, your total pecuniary damages would be $8,000.

Your personal injury lawyer will typically request copies of your bills, receipts, and documentation to calculate your pecuniary damages. Therefore, it is critical to keep all records and documentation pertaining to the accident, injury, and recovery.

What Are Non-Pecuniary Losses?

Non-pecuniary losses are more difficult to quantify as they do not have a specific monetary value attached to them. These are the losses that do not have a direct financial impact but have significantly impacted your life. Non-pecuniary losses include:

-Pain and suffering

-Emotional distress or trauma

-Permanent impairment and disfigurement

-Loss of enjoyment in life activities such as hobbies, sports, socializing, etc.

-Impaired relationships if your relationship with friends, family, and workmates deteriorates as a direct result of the accident.

In some instances, non-pecuniary damages may be awarded on top of pecuniary damages to compensate for the additional harm suffered.

How Are Non-Pecuniary Damages Calculated?

Unlike pecuniary damages, non-pecuniary losses do not have a specific monetary value attached to them. Therefore, it is difficult to calculate the exact amount of compensation for these types of losses.

Typically, insurance companies use a multiplier method to calculate non-pecuniary damages. Under this method, the victim’s total pecuniary damages are multiplied by a factor of 1.5 to 5, depending on the severity of the injuries suffered.

If the victim has sustained severe injuries that have resulted in a long-term disability, a multiplier of 5 may be used. However, if you only sustained minor injuries, a multiplier of 1.5 may be used.

So, if you sustained damages totalling $10,000, and a multiplier of 3 is used, you would be eligible to receive $30,000 for your non-pecuniary losses (that is 3*10,000).

Calculating non-pecuniary damages

It is important to note that the insurance company will not simply multiply your total pecuniary damages by a number.

The adjuster will first consider the severity of your injuries, the impact on your life, and the length of your recovery time. A multiplier will be applied to your total damages based on this information.

In some cases, the court may also consider the following factors when calculating non-pecuniary damages.

The victim’s age: Typically, younger victims are awarded higher compensation as they have a longer life expectancy and will therefore suffer from the injuries for a longer period.

The victim’s contribution to the accident: If the victim contributed to the accident in some way, this might be considered when determining your non-pecuniary losses. For instance, if you were found partly at fault for an accident that resulted in your injuries, your compensation may be reduced accordingly.

The victim’s pre-existing medical conditions: If you had a pre-existing medical condition that was aggravated by the accident, this might be considered when determining your damages.

In some cases, state laws cap non-pecuniary damages, depending on the nature of the injury and details of the accident.

How to Pursue Pecuniary and Non-Pecuniary Damages After an Accident

If you have been injured in an accident caused by someone else’s negligence or wrongdoing, you may be eligible to file a claim or lawsuit for economic and non-economic damages.

To pursue compensation, you will need to work with an experienced personal injury lawyer who can help gather evidence, identify liable parties, and aggressively advocate on your behalf.

Your attorney can also explain the laws in your state that govern the maximum amount of damages you can recover. They will also assess the severity of your injuries to determine the actual value of your claim.

Non-Pecuniary Damages Lawsuit Examples

In 2002, the infamous McDonald’s hot coffee lawsuit spotlighted pecuniary damages. Stella Liebeck, a 79-year-old woman, suffered third-degree burns after spilling a cup of coffee purchased from McDonald’s.

The pecuniary damages comprised medical bills, which reached $20,000, and income loss, which was substantial given her age and inability to work. The jury awarded Liebeck $200,000 in compensatory damages, a sum later reduced to $160,000, acknowledging her 20% fault in the accident.

Liebeck also received non-pecuniary damages. These damages, often referred to as “pain and suffering”, covered her physical discomfort and emotional distress.

Understanding Pecuniary vs Non-Pecuniary Damages

The court awarded her $2.7 million in punitive damages, a staggering amount that highlighted the severity of her non-pecuniary loss. It sent a powerful message about corporate responsibility and consumer safety, causing a stir in the news.

In another case from 2011, a California jury awarded Dana Scruggs $18 million in pecuniary damages after a fatal motorcycle accident. His wife, Desiree, tragically died after a big-rig truck collided with her.

The pecuniary damages accounted for the loss of Desiree’s future earnings and benefits, computed based on her age, health, and income at the time of death. The legal team for Scruggs successfully argued the significant economic loss to the family due to Desiree’s untimely passing.

Demystifying Legal Terminology

The court recognized more than just financial loss. Scruggs received an additional $2.5 million in non-pecuniary damages for the emotional pain and loss of companionship.

Non-pecuniary damages don’t easily translate to dollar amounts, but they reflect the suffering experienced by survivors. This money could not replace Desiree, but it aimed to compensate for the profound emotional trauma experienced by Scruggs.

By comparing these two cases, we can grasp the distinct differences between pecuniary and non-pecuniary damages. Pecuniary damages focus on tangible economic losses, easy to quantify, like medical bills or loss of income.

Damages in Personal Injury Cases

In Liebeck’s case, her hospital bills and loss of work comprised the pecuniary damages. For Scruggs, the loss of his wife’s future earnings constituted pecuniary damages.

Non-pecuniary damages, on the other hand, tackle the intangible. They represent compensation for the emotional distress, physical pain, and loss of enjoyment in life that the victims or their families endure.

The enormous sum Liebeck received underscored the intensity of her suffering, while Scruggs’ non-pecuniary award reflected the emotional loss of losing his spouse.

While dollar amounts can never fully compensate for personal injury or the loss of a loved one, these two high-profile cases illustrate how the legal system attempts to quantify such losses.

They underscore the importance of both pecuniary and non-pecuniary damages in providing redress for victims, and the role they play in delivering justice.

Summary

Pecuniary and non-pecuniary damages are both types of losses that can be suffered after an accident. However, there is a big difference between the two.

Pecuniary damages can be easily calculated and awarded in a court of law. Non-pecuniary damages, on the other hand, are more difficult to calculate and often require expert testimony.

If you have been injured in an accident, it is crucial to understand the differences between these two types of damages so that you can pursue the appropriate type of compensation.

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Pecuniary vs. Non-Pecuniary Damages: What Is the Difference?