Non-Economic Damages in Personal Injury Lawsuits

When an accident occurs due to someone else's negligence or wrongdoing, the law allows for compensation for both financial losses (economic damages) and intangible harm (non-economic damages). Imagine a car accident where you not only face medical bills and lost wages but also experience persistent pain, anxiety, and an inability to participate in activities you once enjoyed. The pain, anxiety, and lost enjoyment represent non-economic damages.

The Nature of Non-Economic Damages

Non-economic damages compensate for injuries that lack direct financial documentation. They address physical pain, emotional distress, and the disruption of normal life. Juries determine the value by assessing how the injury has affected the person’s activities, relationships, and emotional well-being. The goal is to recognize the full extent of suffering that cannot be quantified with receipts or pay stubs.

Examples of Non-Economic Harm

Pain and suffering can manifest as anxiety, depression, or insomnia resulting from the trauma of an accident. A person who previously enjoyed social or recreational activities might lose the ability to participate in sports, attend gatherings, or travel without pain. An injury to one spouse can lead to a loss of companionship and intimacy (loss of consortium) for the other. Emotional anguish can also intensify if a pre-existing condition worsens due to the accident.

Proving Non-Economic Damages

Establishing non-economic losses often involves showing evidence of how the injury affects daily life, emotional wellness, and personal relationships. Plaintiffs may share firsthand accounts of altered routines, disrupted sleep patterns, or diminished enjoyment of favorite activities. Statements from family and friends can also paint a vivid picture of the plaintiff’s pre- and post-accident demeanor, highlighting changes in mood, habitual activities, or general outlook. Professionals such as psychologists or counselors may offer expert opinions on the severity and duration of emotional injuries. Medical records can provide insights into conditions like chronic pain, anxiety, or depression, even if the economic component of treatment is already documented elsewhere.

Calculating Non-Economic Damages

When calculating a settlement offer for non-economic damages, insurers generally review medical records, assess the nature of the injuries, and use internal guidelines or formulas to propose a settlement figure. These evaluations may incorporate factors such as:

• The duration of treatment
• Projected recovery time
• Impact on daily activities
• The presence of any permanent or lingering effects

In some situations, if the insurer believes the requested amount is excessive or unsubstantiated, the claim may be contested in court.

If a case goes to a jury, they may use a method such as the multiplier approach, where total economic damages are multiplied by a factor based on the severity of the harm. For example, a severe injury might warrant a higher multiplier than a less severe one. In contrast, the per diem method assigns a daily monetary value to the injured person’s pain and suffering throughout their recovery. There is no precise method for calculating these damages, and the jury ultimately determines a fair amount.

State Laws and Limits on Damages

Some states have laws that limit the amount of money that can be awarded for pain and suffering and other non-economic damages in personal injury cases. These limits, known as damages caps, can reduce the final compensation regardless of the severity of the injured person’s suffering. For example, if a state has a $250,000 cap on non-economic damages, and a jury awards $500,000, the injured person will only receive $250,000. Many states impose caps only on non-economic damages in certain types of personal injury cases, such as medical malpractice lawsuits.

Last reviewed March 2025