Calculating the Value of a Personal Injury Settlement
Being injured in a car crash or other type of serious accident can instantaneously upend the normal course of your life. You could, for example, require extensive medical treatment, lose your ability to work, and undergo years of emotional distress and pain and suffering. A personal injury lawsuit is a mechanism by which you can pursue damages – that is, money to compensate you for your injuries and losses. Generally speaking, damages in a personal injury lawsuit can either be awarded through a negotiated settlement or (less commonly) a jury verdict and judgment at trial.
A question that we at Whalen Hersh commonly hear from accident victims is, how much money can I expect to obtain through a personal injury settlement? In theory, a personal injury claim is “worth” whatever sum of money a plaintiff is willing to accept during the settlement process. But that settlement process should come only after considering the many factors that go into evaluating a personal injury case.
At Whalen Hersh we won’t tell you your case is worth a million dollars just to get your business. Certainly, because we have been litigating cases for a long time, we can typically give prospective clients a general assessment of what the damages picture looks like, both in terms of trial and settlement. But there are many factors to take into consideration when it comes to evaluating a case and determining what a personal injury case may be worth. Those factors can only be properly assessed once a lawyer has evaluated medical records, talked to witnesses, and adequately considered the evidence. The factors can change during a case and new information can come to light that can significantly change a case evaluation.
The following are some of the most common types of compensable losses and how they’re calculated:
A personal injury damage award typically includes compensation for the plaintiff’s medical expenses. This can include not only medical bills already incurred but also the estimated cost of future care. Medical expenses can take the form of surgery and other procedures, medication, ambulance fees, physical therapy, and the like. Determining the need for and value of future medical expenses will often require the assistance of experts, including medical doctors and others.
Lost Wages or Income
Calculating the value of a personal injury claim may necessitate looking at how the accident and subsequent rehabilitation period has impacted the victim’s ability to earn a living. For example, an injured person may be in the hospital and unable to work due to their injuries, or they miss work due to having to attend medical appointments. Lost earnings include not only the lost income (whether the income is earned as part of a salary or as an hourly wage), but can also include lost fringe benefits.
Loss of Future Income
Loss of future income can also be a significant damage in a personal injury case. This category of damages generally comes into play whenever a plaintiff’s injuries have either rendered them disabled or forced them into a lower paying job. A reduction in earning capacity encompasses all the employment-related income losses that a personal injury victim will likely incur until the end of their working years. Calculating future income losses will often require evidence from experts, such as vocational rehabilitation experts and economists.
One thing the above damages have in common is the relative ease of calculating them. For example, they can be determined through medical bills, pay stubs, tax returns – etc. But how does one put a dollar figure on non-financial yet still legally recognized losses such as pain and suffering and loss of enjoyment of life? The value of these damages can vary greatly from case to case and depend on many different factors. In Colorado, there are also statutory “damage caps” that apply to awarding non-economic damages. Some catastrophic injury cases can easily exceed the damage caps. The value of non-economic damages in less severe injury cases, however, will typically fall somewhere below the caps.
Insurance companies sometimes use a “multiplier” method as a general tool for valuing non-economic damages. A plaintiff’s medical costs are multiplied by a given factor to arrive at a non-economic damages estimate. The multiplier chosen can be influenced by the defendant’s degree of fault, the severity of the plaintiff’s injuries, the plaintiff’s long-term medical diagnosis, and other relevant variables. In our experience, most insurance companies undervalue non-economic damages, which is not a surprise, given the subjective aspect of these damages.
Permanent Impairment Damages
In Colorado, permanent physical impairment damages can be a significant component of a personal injury claim, yet in our experience it is a category of damages that insurance companies either ignore or undervalue. In Colorado, permanent physical impairment damages are uncapped, meaning a jury could aware any amount of money for them. For catastrophic injury cases, the amount a jury could award could be in the many millions of dollars. For less severe injury cases, the potential of proving permanent impairment damages can still add a significant amount to the settlement value of a case.
While not often a large piece of the damages picture, having personal property damaged or destroyed in an accident is generally compensable. The value of property damages is determined by the cost of repairs or, if the property is destroyed, by determining its fair market value.
Contact Whalen Hersh LLP
Whalen Hersh is one of the premier personal injury law firms on the Colorado Front Range. Our accomplished trial lawyers exclusively represent accident victims in personal injury settlement negotiations and litigation. With our help, clients of Whalen Hersh can always expect to receive honest, first-rate legal representation backed by years of experience.