The Two Foolproof Methods to Calculate Non-Economic Losses in a Car Accident Case
Car accidents can cause both physical and emotional harm. While it’s easy to put a price on medical bills and car repairs, it can be much harder to calculate the non-economic losses a victim suffers. Unlike economic losses, there’s no clear bill or receipt to reference for these losses. However, it's essential to account for them when pursuing compensation in a car accident case.
In the legal world, there are two common ways to calculate non-economic losses: the multiplier method and the per diem method. Both are effective approaches, but which one is used often depends on the case’s specifics.
Car accident attorneys can help if you are unsure how to calculate your non-economic losses.
What Are Non-Economic Losses?
Before diving into the two methods, it’s important to understand what non-economic losses are. These damages refer to the intangible effects of an accident that don’t come with a specific dollar amount, such as:
Pain and Suffering: This includes physical discomfort and emotional distress caused by the accident.
Emotional Distress: Trauma, anxiety, depression, or PTSD resulting from the crash.
Loss of Enjoyment in Life: Inability to participate in activities you used to enjoy before the accident.
Loss of Consortium: The impact the accident has on relationships with family members, particularly a spouse.
Non-economic losses can vary greatly depending on the severity of the accident and the lasting impact on the victim’s life. Because of their subjective nature, calculating these losses requires special attention and expertise.
Method 1: The Multiplier Method
The multiplier method is one of the most common ways to calculate non-economic losses in a car accident case. This approach involves multiplying the total economic losses (such as medical bills and lost wages) by a certain number, usually between 1.5 and 5. The more severe the injury and its impact on the victim’s life, the higher the multiplier.
Example of the Multiplier Method:
Let’s say you have $20,000 in economic damages, including medical bills, physical therapy, and lost wages. If the injury was moderate, with ongoing pain and suffering, your attorney might use a multiplier of 3. This would result in $60,000 in non-economic damages, bringing your total compensation claim to $80,000 ($20,000 in economic damages + $60,000 in non-economic damages).
This method works well because it ties the non-economic damages directly to the tangible losses you’ve already incurred. It’s straightforward but does require careful consideration to determine the correct multiplier. A higher multiplier is used for cases involving more severe or long-lasting injuries.
Method 2: The Per Diem Method
The per diem method calculates non-economic losses by assigning a daily rate for pain and suffering, then multiplying that by the number of days the victim has experienced pain since the accident until they reach maximum medical improvement.
Example of the Per Diem Method:
If a victim experiences significant pain for six months (180 days) after a car accident, an attorney might assign a daily rate of $200 based on the severity of the injury. The total non-economic damages would be $36,000 (180 days x $200 per day).
The per diem method works well for cases where the victim’s pain or emotional distress can be clearly measured. It provides a concrete way to calculate the losses, especially when recovery takes time.
Choosing the Right Method
Deciding which method to use depends on the details of the case, including the severity of the injuries, the length of recovery, and how the accident has affected the victim’s life.
The multiplier method is more commonly used in cases involving significant and lasting pain, while the per diem method may be a better fit for temporary injuries that heal over time.
Working with a qualified attorney ensures that your non-economic losses are calculated correctly.
Conclusion
Non-economic damages are an essential part of any car accident case, compensating victims for the pain and suffering and emotional distress they experience. The multiplier method and the per diem method are the two foolproof ways to calculate these damages. Both have their strengths and are chosen based on the specifics of each case.
If you’ve been involved in a car accident, consulting an experienced lawyer can help ensure you receive fair compensation for both your economic and non-economic losses.