Litigation + Valuation Perspectives

Demystifying Valuation, Economic Damages + Forensic Accounting

Personal Injury Damages

When Stan was injured in an automobile accident between his car and a tractor trailer operated by one of the largest shipping contractors in the U.S., his wife Maria wanted to “sue them for all they are worth.” When Stan and Maria consulted counsel, their attorney started by explaining the type of damages which were potentially available for them to pursue.

Economic Damages – assessed to provide compensation for monetary losses such as past and future earnings, past and future medical expenses, value of domestic services and loss of employment.

Non-economic Damages – subjective compensation for non-monetary losses such as pain and suffering, emotional distress, loss of consortium and loss of enjoyment of life.

Punitive Damages – awarded with the purpose of punishment; not awarded to compensate a loss but to deter intentional or reckless behavior.

Stan and Maria’s attorney retained a forensic accountant to calculate the amount of economic damages attributable to Stan’s accident. The forensic accountant was tasked with preparing a personal injury economic damages report which provided an analysis of any monetary amounts Stan would have realized “but for” the injuries sustained in the accident.

The forensic accountant’s report included damages related to:

Lost Earnings – expected earnings capacity of the injured party “but for” the accident.

Fringe Benefits – the loss of fringe benefits available to the injured party “but for” the accident.

Household Services – value of services which can no longer be performed by the injured party.

Medical Care – costs incurred and expected to be incurred in the future related to the medical conditions sustained in the accident.

Stan and Maria were able to settle prior to trial for $1,500,000 of economic damages and $1,000,000 for pain and suffering.

For more information of damages in a personal injury case, see the article “Determination of Damages in a Personal Injury Case” in the March 2015 BV/Lit Essentials e-Newsletter.

By Melissa Loughlin-Sines, ABV/CPA, CVA, CFE, CFF

Comments

  1. I was recently in a motorcycle accident in which I snapped my femur. I haven’t been able to do anything for a long time. I don’t know what I would do if I had a family to support. I would definitely recommend a lawyer for those in serious accidents.

  2. Bob Lowe says:

    Thank you for the post. This is great information. I think the benefits of having an attorney definitely out weigh the cost of hiring one. Not all accidents are the same and are not all handled the same. That is why I feel it is super important and worth the cost to have the attorney do the work and fight for me if something bad were to ever happen.

  3. Sam Fisher says:

    With personal injury, you need to know the type of damages that go along with it. I do like the example you gave. It showed the types of damages that could be put against the wrong-doer in addition to other bits you may not of knows were involved.

  4. Wow I’m glad I found this. I had no idea there was so many different types of damages. I definitely need to gather as much information as possible. I think I may qualify for economic, or future loss of earnings in this case. I like that I can easily understand the bullets, without scraping through a large text block. I considered each one individually. Thanks for sharing this!

  5. Thanks for the information! Knowing about the different types of personal injury damages can help people know whether they’re available to pursue in a case. Going for non-economic damages is what I should pursue in my case. I would like to compensated for the emotional distress that I’ve been through in addition to the pain that I’ve felt from my injury. Receiving the compensation that I need for these damages will help me to recover from my injury.

  6. claim of the personal injury damages victim will win the case by the help of personal injury lawyer. but sometime this types of case turn a new way. here a good definition of personal injury case study. this story belongs lots of important criteria where a lawyer learn more.

  7. Elaine L. says:

    Love the list, though I still can’t seem to wrap my head around the non-economic damages. I understand the need and point of them but I can’t be alone when I say it seems impossible to measure “loss of enjoyment of life” in a monetary value. I suppose I don’t like this simply because there’s no other way than what the judge decides upon. Unless they have a scale that converts personal emotion to monetary value, if so I would love to see it. Anyway, thanks for the article, sure is gonna keep me researching all night.

  8. Owen Camden says:

    It is really interesting to learn about the different damages that come into play in cases like this. I think that it is really important to be able to relate cases like this back to the different types of damages. Doing this can really help you build a solid case. It is so important to work closely with a good lawyer when it comes to things like this.

  9. You make a good point about there being different types of damages. Most people might think that damages would be limited to economic damages and health bills. There may also include punitive damages and types of economic damages that you wouldn’t expect. Personal injury lawyers can also help with finding out just how much you are owed.

  10. Fitz says:

    Hello, and thank you very much for having shared this article on what to do when you’ve received a personal injury. There are many reasons why it’s important to take care of these situations responsibly and professionally. I think it’s always good to research and find an injury attorney who best fits your needs.

  11. Gus Chiggins says:

    Losing money because of inability to work after a car accident would most definitely make the situation much more complicated than it already would be. When my friend was in a motorcycle accident, she crushed her foot and had to have many surgeries to correct what had been done. She was out of work for almost a month, and therefore her finances suffered greatly. I hope if anything like this ever happens to me, I will have the support of my family and friends to rely on.

  12. Chase Wilson says:

    Great article Melissa! Very detailed without being difficult to understand! I was wondering if you could elaborate on non-economic damages for me? Such as the way that is measured by a personal injury lawyer, how often it is used, and how that is determined.

    • admin says:

      Chase –

      Thank you for your question and interest in our blog. Non-economic damages cannot be quantified from existing monetary records but are put forth by attorneys through declarations and testimony. For instance, if claiming loss of consortium or loss of enjoyment of life, declarations may be made by the plaintiff regarding personal history prior to the accident/injury and after. Testimony may also be offered by the spouse and friend and family members regarding the same.

      I am not sure how often non-economic damages are asked for, as we are often only asked to quantify the economic damages and aren’t involved with the rest of the case. Determination of an award on non-economic damages is going to be left up to the judge or jury, so it is nearly impossible to predict at what level they will be awarded.

      Melissa E. Loughlin-Sines, CPA, CFE, CVA, CFF, ABV