In a car accident lawsuit, or indeed in almost any type of personal injury lawsuit, the claimant or plaintiff's damages are usually divided into two types:
Special damages stemming from a car accident include lost earnings and lost earning capacity, medical bills, and other financial losses. Special damages are capable of exact calculation because they can be, and are, calculated to the dollar.
Lost earnings and lost earning capacity refer to the income (i.e., wages or salary) that the injured person lost -- past, present, and future -- as a result of the car accident. Lost earnings and lost earning capacity also includes any employment benefits such as health insurance, vacation time, pension or 401(k) contributions, and the like that the car accident plaintiff may have lost. Medical bills include not just the bills that the injured person incurred for his/her past medical treatment, but also the bills that he/she is reasonably likely to incur for future medical treatment necessitated by the car accident injuries.
This category of damages includes pain and suffering and other losses that aren't so easy to put a dollar figure on. Pain and suffering can be broken down into physical and mental pain and suffering.
Physical pain and suffering results from the victim's actual pain and discomfort from injuries and medical treatment, and other physically-manifested ill effects of the accident.
Mental pain and suffering is generally a product of the victim's physical pain and suffering and includes things like mental anguish, emotional distress, loss of enjoyment of life, fear, anger, humiliation, anxiety, and shock. Significant mental pain and suffering can also cause severe anger, appetite loss, lack of energy, sexual dysfunction, loss of interest in sex, mood swings, and/or sleep disturbances. Very severe mental pain and suffering after a car accident can even constitute post-traumatic stress disorder (PTSD).
Calculating past lost earnings is pretty easy if you have a full time job and you work for someone else. If you earn $30,000 per year, and were out of work for six months, you lost $15,000, plus lost employment benefits. Calculating future lost earning capacity is somewhat more difficult.
Let's take an example. Let's say that you had earned $40,000 per year, but that, after your recovery, you can only return to a part time job earning $20,000 per year. Your lost earning capacity is thus $20,000 per year for the remainder of your work life expectancy. Work life expectancy is a statistical measure of how many more years a person is reasonably expected to work, based on that person's age, sex, and race. It is based on federal government statistics. The next step is to calculate what $20,000 per year would be worth in the future.
Lost Earning Capacity and Present Value. Because lost earning capacity involves a calculation of losses that may extend for many years into the future, it has to be calculated in terms of its present value. Present value is a financial concept that involves determining the value of a future stream of income (i.e., your weekly paycheck) as if it were all in a bank account today. In other words, how much money does your employer need in a bank account today in order to pay you your salary for, say, the next ten years (if you will be permanently disabled as a result of the car accident)? This is a complex financial calculation, and is customarily performed by an economist that your lawyer will hire as an expert witness in your case.
Get an estimate of what your car accident settlement amount could be, see Car Accident Settlement Calculator.
There are no guidelines for determining the value of an injured person's pain and suffering after a car accident (or any other injury for that matter). A jury cannot look at a chart to figure out how much to award for pain and suffering. In most states, judges simply instruct juries in car accident cases to use their good sense, background, and experience in determining what would be a fair and reasonable figure to compensate for the plaintiff's pain and suffering.
You may have read about a "multiplier" in personal injury cases. Using a "multiplier" means that insurance companies calculate pain and suffering as being worth some multiple of your special damages. Unfortunately, you should only view the "multiplier" concept as a very rough estimate at best because there are so many other factors that affect the valuation of damages in a car accident case. Some of the more important factors are: