How Personal Injury Settlements are Calculated

Personal injury” is a ubiquitous term used by lawyers and advertisers alike. In reality, no two personal injury cases are alike. Sometimes two people are involved sometimes 15. Sometimes it is a car accident and other times it is slip in a grocery store. Maybe you broke your leg or maybe you hit your head. All of these factors bear into the valuation of personal injury settlements.

Litigation is expensive, trials are unpredictable and juries are out of their element. For many reasons, most lawyers prefer to settle cases rather than risk their clients’ chance at recovery before a jury. No matter how strong or well-prepared trials are unpredictable.

So this bears the question, how do you value your settlement? There are a number of factors but essentially your “damages” break into two categories: economic and non-economic damages. Economic damages are things you get a receipt for, like: medical bills, prescriptions, lost work (i.e. your missed wages) and physical therapy. What your attorney will essentially do is add up all of your bills to arrive at the number you already spent. To project out how much you will spend in the future, like future medical costs, your attorney will usually consult with a medical expert.

Noneconomic damages are for ephemeral harms like: pain and suffering, emotional distress and loss of companionship with your spouse, these numbers more “squishy” than the economic damages. It is mostly based on your testimony and personal experience. Most attorneys will also consult with another medical expert to lend support to your testimony.

Once you have these two numbers you then negotiate with your opposing party. These two numbers combined represent the upper limit of what you can achieve at trial therefore a settlement is going to be less. Measuring noneconomic damages are difficult – so this is the number that you usually use to settle.

If you are thinking about settling your case, then it is important you be realistic about the numbers you can achieve. If you settle your case it will be for less money than trial but it is guaranteed. Trials are always unpredictable. Juries will judge you based on your hair, appearance, posture, face and many other reasons. There are trade-offs with both options.