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Non-Economic Damages: What Are They, and How Do I Calculate Them?

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Non-economic damages are award to compensate you for harm to your quality of life. They’re not available for all claims, but they are recoverable for certain business claims that are characterized as torts.

Only a nihilist or a tort-reform fanatic would posit that damages should be limited to what money one earns or doesn’t earn. Everyone understands that people work not only for the dignity and purpose that work affords but in order to have a decent quality of life outside of work. When – due to somebody else’s fault – you are subjected to pain, suffering, discomfort, loss of earning capacity, stress, anxiety, loss of sleep, loss of physical, intellectual, and/or emotional capacity, and/or any of these in combination, your quality of life is negatively affected. In addition, you’ll have been deprived of your free will as to whether you’d choose to undertake such an experience. Thus, you are made to go through any number of harmful experiences – some of them long-lasting and/or permanent – all against your will. The law provides that you are due just compensation for each of these aspects of deprivation of your quality of life.

How then, to quantify such losses? The best procedure we’ve found is as follows:

1) List out, qualitatively, the different kinds of harms to your quality of life that you have sustained, i.e.

  • Loss of income
  • Loss of earning capacity
  • Pain
  • Physical discomfort
  • Suffering,
  • Stress/anxiety,
  • loss of sleep,
  • loss of physical capabilities
  • loss of enjoyment of hobbies (athletic pursuits, and the like)
  • Deterioration of general health
  • Loss of intellectual capacity
  • Loss of emotional capacity
  • Loss of intimacy and/or consortium

2) Break down this list into two categories: (a) Quasi-economic non-economic, and (b) pure non-economic. In the list above the first two items are best characterized as quasi-economic non-economic [that’s not a term of art per se, it’s a kind of shorthand that we’ll use here for practical reference]; the rest (save perhaps for loss of intellectual capacity) are more in the nature of pure non-economic loses.

For our purposes, you should think of quasi-economic non-economic losses as the consequences of not having money. The loss of money itself is compensable as economic damages (out-of-pocket expenses, medical bills, lost income, etc). However, as everyone who’s ever struggled financially to any degree understands, not having access to money negatively affects one’s quality of life. For instance, absence of money costs you an opportunity to enjoy things you might otherwise have enjoyed, such as peace of mind; better food; downtime with loved ones; access to the best medical providers; the opportunity to pursue life-enriching experiences such as travel, education, and service to others. Also included is the negative experience that is substituted in the place of the experiences you would have enjoyed. These negative experiences typically include loss of sleep, stress, and anxiety about paying the bills or regaining essential functions of daily life, irritability, anger, depression, loss of sex drive, etc, and in extremity, lack of access to basic health care and even hunger or loss of essential security such as housing, plus (perhaps) the humiliation of reliance on public assistance or needing to seek financial help from loved ones, and the like – generally, the products of living in a long-term, high-stress environment. These are the non-economic costs of not having money (a.k.a. your “quasi-economic non-economic damages”).

Pure non-economic losses are harms to your quality of life not directly traceable to absence of money and include physical pain, discomfort, lack of sleep (traceable to pain, not to anxiety from lack of money, to the extent you can separate the two), loss of physical intimacy, and the like.

Needless to say, listing out each of these items systematically – even in just a qualitative manner without getting too far into the details – can be emotionally exhausting. Even though going through such a process can be emotionally difficult, it is very necessary if you’re going to properly relate the losses for which you should be fairly compensated.

Critically, you must avoid framing your losses as though you are a victim. Instead, you should try to frame it as follows: your non-economic and non-economic losses are bad because they strip you of the opportunity to be a HERO. (For example, lack of access to security and peace of mind may not allow you to do volunteer work to help underprivileged children, protect the environment, or pursue whatever larger social goal beyond your own well-being may be important to you). You must also strive to heroically overcome these difficulties and to demonstrate that striving. Juries reward people who do that, but they punish people whom they see as whiners, and victimhood is pretty close to whining in the eyes of a jury.

Every day, fill your daily log not only with records of how the harms and deprivations have negatively affected your life, but keep a daily record of your efforts to keep yourself on track, stay positive, and overcome your difficulties. This is Critical.

Why? The money a jury would award must serve a purpose. You’re not asking for a handout; you’re fighting a heroic battle, and you just need a helping hand to overcome phenomenal obstacles that have been placed in your path. But overcome them you will, and of this, the jury will have no doubt, because you are the Horatio Alger figure who valiantly, resolutely, and humbly strives consistently to overcome the hardships he unfairly faces. THAT IS YOUR STORY. That MUST be your story. Think of all of the stories that you’ve come across in movies, books, and TV series that inspire you. What are the attributes of all of the heroes?

  • Long odds? Check.
  • Unfair obstacles? Check.
  • Freaking out? Negative
  • Whining? Negative
  • Indomitable, can-do attitude? Check.
  • Incredible persistence in the face of unimaginable difficulty? Check.
  • Pride and arrogance? Negative.
  • Humility? Check.

You get the idea. Just pick your protagonist, and you’ll see he/she fits this profile nearly exactly. Harry Potter. Katniss Everdeen. The Hobbits from The Lord of the Rings. Louis Zamperini from Unbroken. The 1980 US Olympic Hockey Team (incredible long-shots vs. the 4x Gold Medalist Soviet Red Army Team). Terry Fox. You get the idea. That’s who you must be because that’s whom Juries are wired to reward.

Next, how to quantify your damages. Here, the frame gets pretty simple:

  • What would you reasonably demand in payment to be deprived of each positive experience you lost out on?
  • What would you reasonably demand payment in order to subject yourself to each of the negative experiences you’ve had to endure?
  • What compensation would you reasonably demand in order to have been stripped of your free will as to each of these, particularly the negative items?

Keep it conservative, at risk of damaging your credibility. Take your time with it, talk with your partner, talk with your friends and loved ones. Lean on them to help you figure this out.

Stay strong out there. We hope this helps. Please feel free to call on us if you have suffered a catastrophic personal or business loss and need help in assessing your non-economic damages.

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