Two Ways to Calculate a Pain and Suffering Settlement

In a personal injury case, there are two types of damages available to the plaintiff – economic or special damages and non-economic or general damages.

Any loss resulting directly from the accident or the injury comes under special damages. Typical examples include loss of wages, medical bills, property damage, and other out-of-pocket costs.  Special damages are easy to calculate.

On the other hand, general damages include pain and suffering – anxiety, discomfort, stress, and emotional stress linked to the accident and the plaintiff’s injury.

Calculating pain and suffering is not as straightforward as economic damages as they cannot be easily quantified.

Quantifying Pain and Suffering

Personal injury lawyers in Decatur and elsewhere use different methods to calculate pain and suffering damages. The two most commonly used methods are the multiplier method and the per diem or daily rate method.

Multiplier Method

To calculate pain and suffering, insurance companies add up all the special damages and multiply it with a multiplier (usually between 1.5 and 5).

The multiplier should reflect the degree of seriousness of the plaintiff’s pain and suffering. If, for instance, the plaintiff suffered a life-threatening injury, the multiplier must be on the high end (4 or 5).

A plaintiff who suffered very serious, life-altering injuries can use an even higher multiplier (6 or 7).

A multiplier of more than five can be realistically considered if:

  • The plaintiff suffered an irreversible injury
  • The defendant’s fault is obvious
  • The plaintiff’s personal injury doctor in Atlanta predicts (backed by medical documents and evidence) a prolonged recovery (six months or more)
  • The plaintiff suffers some permanent consequence (can be pain, immobility, scarring, discomfort, weakness)
  • The plaintiff’s doctor determines and clearly indicates that the person will experience recurring or degenerative, or future problems due to their injuries

Here are some factors to consider in determining the appropriate multiplier:

  • The seriousness of the plaintiff’s injuries and how they will impact the different aspects of their life
  • Whether there is clear proof of pain and suffering based on verified documents
  • How long the recovery period will be
  • The obviousness of the defendant’s (party-at-fault) fault

Insurance companies usually use the multiplier method to calculate pain and suffering. Often, the sticking point in settlement negotiations is the multiplier to be used. While the plaintiff’s legal team will want to use a higher multiplier, the defendant or the insurance company will want to use a lower multiplier.

An Example

While Aron was driving on a highway, a car jumped a red light and crashed into his vehicle. Aron was seriously injured in the accident. He suffered a traumatic brain injury and a broken nose.

Aron’s special damages, including lost wages, medical bills, and other treatment costs, were $15,000. Aron’s multiplier is most likely to be close to five, as Aron was not at fault, and he suffered life-altering injuries.

Estimated settlement – $15,000X5=$75,000

Daily Rate/Per Diem

Another common method used to calculate pain and suffering is the per diem (Latin for ‘per day’) method.

In this method, the plaintiff demands a certain dollar amount for every day they had to live with the pain and inconvenience caused due to their injury.

Plaintiffs using this method should justify the daily rate they use. To ensure your daily rate is reasonable, use your actual daily earnings.

The argument? Dealing with the pain caused by your injury on a daily basis is comparable to the effort of going to work every day.

An Example

Sasha was injured in a car accident that wasn’t her fault. She suffered a neck injury and was forced to wear a neck brace and take pain medications for two months.

She continued to experience pain for the next three months (total – five months or 150 days of pain and discomfort). At her current job, Sasha earns $50,000 per year – $200per day (assuming that she works 250 days a year).

Estimated settlement – $200X 150=$30,000

This method cannot be used if the plaintiff sufferers a permanent or long-term injury.

Use Both Methods

It is a good idea to use both methods to start and then adjust your demand from within the range you get. If a drunk motorist jumped a red light and rear-ended you at full speed, start on the highest end of your settlement range.

If you were injured on private property and liability is not clear, the insurance company is likely to offer a low settlement.

 

Share on facebook
Share on twitter
Share on linkedin
Share on reddit