Damaged, Part II

by Nicholas Walsh, PA

Last month I described the elements of an injury case: duty, breach of the duty, damages, and a sufficiently direct link between the damages and the breach. This column will focus on what kinds of damages a claimant can recover.

The great majority of injury cases can be tried either to a judge alone or to a jury. If neither side wants a jury, a judge decides the case. If either side elects a jury, the jury decides. Here I’ll refer to jury trials, but the same principles apply if the case is decided without a jury and the judge decides what damages are awarded.

There are two broad categories of damages: “special” damages and non-monetary damages. Examples of special damages include medical bills, prescription costs, wheelchair rentals, home health care, lost wages and other items that can be specifically identified and added up. Insurance companies don’t just take a lawyer’s say so as to special damages, and each item must be proven with receipts or a similar paper trail. If you have an injury claim, keep careful track of these costs, save all your receipts, and deliver them, in organized fashion, to your lawyer. You’ll be putting dollars in your pocket.

One type of special damages is future money losses. For example, suppose at age 35 a person is badly injured and will never work again. The individual earned $50 thousand a year and would likely have worked another thirty years, to age 65. If you add up the future lost wages you get $1.5 million. Does fair compensation mean the jury should give the claimant $1.5 million for future lost wages? No, because receiving $1.5 million today is far more valuable than receiving the same amount of money in equal payments spread over the next thirty years. An economist, asked to assume annual $50,000 payments for thirty years, and asked to get out the crystal ball and predict future interest rates, can calculate what sum of money in hand today would equal that stream of payments.

For inquiring minds, assuming future interest rates of 4%, around $450,000 today is equivalent to $1.5 million paid monthly over thirty years. The lower the assumed interest rate, the higher the present value.

The same present value calculation can be done for future medical costs. If the jury decides the future medicals will total $50 thousand a year, that expense, spread over the anticipated life span of the injured person, can be reduced to a lump sum in hand today.

Present value calculations are performed by highly paid economists skilled at both the calculating and at teaching a judge or jury, during trial testimony, how these complex principles add up to a damages award. In a serious injury case a great economist is a huge asset. Selecting and hiring such an economist, and footing the bill, is a key part of the lawyer’s job.

Economists also identify and quantify the value of other economic damages, such as the dollar value represented by an injured man’s inability to work around the home.

In addition to special damages there are the damages that are almost impossible to reduce to money, such as those for past and future pain and suffering. In a well-used closing argument, a lawyer might show the jury an alarm clock, and tell the jury that if the jury could take the clock into the jury room and turn back time to before the injury, he’d asked the jury to do so. Because that can’t happen all he can do is ask them to award his client money. There’s no real way to calculate such damages, although a lawyer can suggest amounts. These damages are really just up to the discretion of the jury. In truly awful cases damages for pain and suffering can result in huge verdicts – but most such plaintiffs would prefer the alarm clock.

Maine juries are great, replete with common sense and prepared to give a solid damages award if the facts are right. What Maine jurors will not stand for is overreaching, by which I mean a plaintiff exaggerating his or her injuries, even a little, in an effort to get a big award. In my opinion it’s a common mistake, one which a jury will punish.

Stay out of trouble.

Nicholas Walsh is an admiralty attorney with an office in Portland, Maine. He may be reached at 207-772-2191, or nwalsh@gwi.net.