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Compensatory Damages in a Personal Injury Case

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By Yosi Yahoudai
Founder and Managing Partner

What are compensatory damages in a California personal injury case?

Compensatory damages in a California personal injury case are meant to compensate the injured party for the harm they have suffered as a result of someone else’s negligence or intentional conduct. The purpose is to restore the injured party, as much as possible, to the condition they were in before the injury.

The types of harm for which compensatory damages may be awarded in California can be divided into two categories:

Economic Damages

These are damages that represent actual, out-of-pocket costs, and they typically have a clear monetary value. They can include medical expenses, lost income, property damage, or more. Keep reading to learn more about economic damages.

Non-economic Damages

These are damages that don’t have a clear monetary value but represent real harm done to the victim. They can include pain and suffering, loss of consortium, loss of enjoyment of life, or more. You can learn more about non-economic damages further down in this article.

The amount of compensatory damages awarded in a personal injury case is usually determined by the jury (or the judge in a bench trial) and is based on the evidence presented during the trial.

How are compensatory damages different from punitive damages?

Compensatory damages and punitive damages serve different purposes in a California personal injury case.

As already mentioned, compensatory damages are designed to compensate the victim for the losses they have suffered due to an injury. This is intended to make them “whole” again by providing financial compensation for things such as medical expenses, lost wages, and pain and suffering.

Punitive damages, on the other hand, are not primarily meant to compensate the victim. Instead, they are designed to punish the wrongdoer for particularly egregious or malicious conduct and to deter similar conduct in the future. They are awarded over and above the number of compensatory damages, which is why they are also sometimes called “exemplary damages”.

In California, punitive damages can only be awarded if the plaintiff proves by clear and convincing evidence that the defendant engaged in “malice, oppression, or fraud”. This is a higher standard of proof than for most elements of a personal injury case, which only require proof by a preponderance of the evidence.

“Malice” involves conduct intended to cause injury or despicable conduct carried out with a willful and knowing disregard for the rights or safety of others. “Oppression” means despicable conduct that subjects a person to cruel and unjust hardship in knowing disregard for their rights. “Fraud” means intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention to deprive a person of legal rights or otherwise cause injury.

In contrast to compensatory damages, there is no precise formula to calculate punitive damages. Instead, the jury (or the judge in a bench trial) determines an amount that they believe will sufficiently punish the defendant and deter similar conduct. However, the U.S. Supreme Court has suggested that, in most cases, punitive damages should not exceed a single-digit ratio to compensatory damages.

What are economic damages in personal injury cases?

Economic damages in a California personal injury case are designed to compensate the victim for financial losses directly attributable to their injuries. These are often called “special damages” and are typically measurable and quantifiable. They can include:

  1. Medical Expenses: This includes the costs of emergency services, hospital stays, doctor visits, physical therapy, prescription medication, assistive devices, rehabilitation, and any other medical expenses that are necessary as a result of the injury. It also includes projected future medical expenses if the injury requires ongoing care.
  2. Lost Wages: If the injury causes the victim to miss work, they can be compensated for the wages they lost during that time. This also includes any loss of earning capacity if the victim’s ability to earn a living has been diminished due to their injury.
  3. Property Damage: If any personal property was damaged in the incident that caused the injury (such as a car in an automobile accident), the cost of repairing or replacing that property can be included in economic damages.
  4. Out-of-pocket expenses: Any other costs directly related to the injury, such as the cost of hiring help for household chores that the injured person can no longer perform, or travel costs for medical treatment, can also be recovered as economic damages.

Remember, the aim of economic damages is to return the injured party, as much as possible, to the financial position they were in prior to the injury.

What are non-economic damages in personal injury cases?

Non-economic damages in a California personal injury case are designed to compensate the victim for non-monetary harms they have suffered as a result of their injuries. These damages, often referred to as “general damages,” can be more subjective and can vary significantly from case to case. They include:

  1. Pain and Suffering: This includes compensation for the physical pain and emotional distress experienced by the victim as a result of their injuries. Emotional distress can encompass anxiety, depression, insomnia, and other psychological effects.
  2. Loss of Enjoyment of Life: If the injuries prevent the victim from enjoying daily activities or hobbies they used to participate in, they may be compensated for this loss.
  3. Emotional Distress: Emotional distress covers the psychological impact of the injury, which can include depression, anxiety, fear, and other emotional suffering.
  4. Disfigurement or Physical Impairment: If the victim’s physical appearance has been altered or if they have suffered a lasting physical disability as a result of their injuries, they can be compensated for these harms.
  5. Loss of Consortium: This refers to damages suffered by the spouse or family members of the injured party, such as loss of companionship, affection, sexual relations, and shared experiences.

Calculating non-economic damages can be complex since these losses do not come with a specific price tag. It is typically up to the discretion of the jury (or the judge in a bench trial) to decide the amount that fairly compensates the victim for these non-economic damages.

How Do Insurance Companies Handle Compensatory Damages?

In a California personal injury case, insurance companies typically handle compensatory damages in the following way:

  1. Investigation: Once a claim is filed, the insurance company will conduct an investigation. This may involve reviewing the details of the accident, examining the injuries sustained, and evaluating any property damage. The insurer may also review medical records, police reports, and any other relevant documentation.
  2. Determination of Fault: Based on the evidence, the insurance company will try to determine who was at fault for the accident. California follows a “pure comparative negligence” rule, meaning that an injured person can still receive compensation even if they were partially at fault for the accident. However, their damages will be reduced by a percentage equal to their degree of fault.
  3. Valuation of Damages: The insurance company will try to estimate the total value of the compensatory damages, which includes both economic and non-economic damages. For economic damages, they will look at actual financial costs, such as medical bills, lost wages, and property damage. Non-economic damages, like pain and suffering, are more subjective and are often calculated based on the severity of the injury, the amount of pain experienced, the recovery time, and the impact on the person’s life.
  4. Settlement Negotiation: After valuing the damages, the insurance company will usually make a settlement offer. This is a lump sum payment that is meant to cover all of the victim’s damages. The victim can accept this offer, negotiate for a higher amount, or reject it and proceed to trial. If a settlement is reached, it will usually involve the victim releasing all future claims related to the accident.
  5. Litigation: If a settlement cannot be reached, the case may go to trial. Here, the jury or judge will determine the amount of compensatory damages. The insurance company will be responsible for paying these damages up to the limits of the policy.
  6. Payment: Once a settlement is reached or a judgment is rendered, the insurance company will typically pay the awarded amount directly to the injured party or to the party’s attorney, who will then distribute the funds appropriately.

Keep in mind that insurance companies are businesses, and their goal is often to pay out as little as possible on claims. Therefore, it’s generally a good idea for a person who has been injured in an accident to seek an experienced personal injury attorney with experience winning compensatory damages to ensure that they receive a fair amount of compensation.

What is the damage cap for compensatory damages in a California personal injury case?

As of the writing of this article in May 2023, California does not impose a cap on compensatory damages in most personal injury cases. This means there is generally no upper limit to the amount that a plaintiff can recover for economic damages (like medical expenses and lost wages) or non-economic damages (like pain and suffering).

However, there are exceptions to this rule. Notably, California does impose a cap on non-economic damages in medical malpractice cases. Under the Medical Injury Compensation Reform Act (MICRA), non-economic damages in medical malpractice cases are capped at $250,000.

It’s also important to note that while there isn’t a cap on compensatory damages in most personal injury cases, the number of damages awarded will be based on the specific facts of the case and the extent of the plaintiff’s injuries.

Furthermore, California follows a “pure comparative negligence” rule, which means that if a plaintiff is found to be partially at fault for their injuries, their damages will be reduced by a percentage equal to their degree of fault.

Given the complexities of personal injury law and the specifics that can vary from case to case, individuals seeking to understand their potential compensation in a personal injury case should consult with a qualified personal injury attorney that can review the specifics of a case to provide a realistic expectation for what the compensation could be.

Contact J&Y Law Today For Help With Compensatory Damages

J&Y Law is a leading California personal injury accident law firm with a track record of success in obtaining compensatory damages for our clients. You can reach out to J&Y Law today to schedule a free consultation about your unique situation to see what options are available to you.

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About the Author
Yosi Yahoudai is a founder and the managing partner of J&Y. His practice is comprised primarily of cases involving automobile and motorcycle accidents, but he also represents people in premises liability lawsuits, including suits alleging dangerous conditions of public property, third-party criminal conduct, and intentional torts. He also has expertise in cases involving product defects, dog bites, elder abuse, and sexual assault. He earned his Bachelor of Arts from the University of California and is admitted to practice in all California State Courts, and the United States District Court for the Southern District of California. If you have any questions about this article, you can contact Yosi by clicking here.