Economic vs. Non-Economic Damages

Posted On March 25, 2024 / By Manning Law / Personal Injury

The civil justice system in Colorado allows people who are injured by the negligence of others to seek damages, or financial compensation, for the losses they suffered. Working with a Denver personal injury lawyer to file a personal injury claim could result in compensatory damages, or a monetary award meant to compensate the victim. The two categories of compensatory damages are economic and non-economic.

What Are Economic Damages?

Economic damages refer to financial compensation that may be awarded to reimburse a victim for the monetary or financial costs associated with the accident. Economic damages are also known as tangible or specific damages.

The economic damages involved in a personal injury claim in Colorado can include:

  • Past and future medical costs 
  • Lost wages or earnings
  • Lost capacity to earn in the future
  • Disability costs and accommodations 
  • Home or vehicle modifications
  • Property damage repairs or replacement 
  • Attorney’s fees and court costs
  • Other out-of-pocket expenses, such as transportation

Any money the victim has spent due to the accident could be reimbursed with an economic damage award. In addition, future foreseeable costs associated with the accident or long-term injuries could be listed as economic damages.

What Are Non-Economic Damages? 

Victims injured by negligence are often able to recover more than just the monetary costs caused by an accident. They can also receive payment for their intangible losses, known as non-economic damages or pain and suffering. Non-economic damages can make an accident victim whole again by paying for how the accident and injury impacted the victim’s life.

Non-economic damages can include:

  • Physical pain
  • Emotional distress
  • Mental anguish
  • Psychological trauma
  • Post-traumatic stress disorder (PTSD)
  • Mental health conditions, such as depression or anxiety
  • Scarring or disfigurement
  • Permanent disability
  • Loss of enjoyment of life
  • Loss of consortium
  • Grief or mourning, in a wrongful death claim

Non-economic damages are more subjective than economic damages. Every accident victim has a unique experience. For this reason, non-economic damages are more difficult to calculate. Valuing a non-economic damage award takes an in-depth look at how the victim’s life has been affected.

Calculating Economic vs. Non-Economic Damages

Economic damages are calculated by adding up all of the financial costs of the incident, typically using the victim’s bills and receipts. Future potential costs will also be determined, often with assistance from a financial expert. By contrast, non-economic damages are not calculated using hard numbers. If a personal injury claim goes to court, non-economic damages are determined by a jury after seeing how the accident and injury impacted the victim. 

While a jury is not required to use a specific equation to calculate non-economic damages, the Multiplier Method is commonly used. This method takes the amount awarded to the plaintiff in economic damages and multiplies it by a number between 0.5 and 5 based on the severity of the victim’s injury. 

For example, if a plaintiff received $100,000 in economic damages and the jury selected a multiplier of three, the amount of non-economic damages awarded would be $300,000. Colorado has a damage cap of $250,000 on pain and suffering, meaning – except in a case of permanent physical impairment – no victim can recover more than $250,000 (plus inflation) for non-economic damages.

To find out how much your personal injury claim in Colorado might be worth, contact Manning Law for a free case evaluation.