Factors In Determining Personal Injury Value

“How much is my claim worth?” is one of the most common questions we receive from prospective clients. It would obviously be comforting for injury victims to know the amount they can expect at trial or in a negotiated settlement before they decide whether to start a lawsuit. 

This article will give you a general understanding of the most important factors that influence the range of settlement values or damages awards at trial. There are many variables that must be investigated and assessed, including the long-term functional  impact of their injuries on their daily activities, employment, future health care and home maintenance needs. 

Unfortunately, the internet is full of spectacular, high-value “guarantees” by personal injury lawyers, promising ideal or best-case settlement numbers as if they were commonplace. Such guarantees are misleading, a marketing strategy used to attract clients, most of whom will end up disappointed by their eventual compensation. In all but the clearest cases, though, it is difficult to provide a reliable estimate of the potential range of compensation in the immediate aftermath of the accident.

A reputable, client-focused personal injury firm will take the time to educate you about the many factors at play in determining the value of your claim before providing an opinion on the potential range of damages at trial or in settlement discussions. While this might still involve comparisons to some of the firm’s successful damages awards and settlements, you will also understand the steps required, risks, as well as strengths and weaknesses of the cases that led to these results. 

The following brief guide will give you a general understanding of the most important factors that influence the range of settlement values or damages awards at trial. Please do not hesitate to contact us with questions and concerns, or if you need a second opinion about your potential lawsuit. 

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It is not uncommon to encounter two or more cases with equally severe collisions, or with the same initial injuries suffered, yet the compensation each injury victim receives is remarkably different. Although the circumstances might be similar, determining the appropriate compensation a particular plaintiff receives is based on other factors, both at trial and in settlement discussions. 

Degree of Impairment and Impact

On some level, it seems obvious that the more serious the injury, the larger the potential settlement. The most severe injuries (e.g.: spinal cord injuries/paralysis, severe brain injuries, amputations, blindness) usually lead to large compensation awards. A broken ankle requiring multiple surgeries will often result in more ongoing complications and functional limitations than a soft-tissue injury like a sprain of the same ankle. However, it is important to bear in mind that many orthopedic injuries heal fully in time, whereas damage from soft-tissue injuries can lead to disabling chronic pain.  

A more reliable indicator of potential value in most cases is the degree of ongoing impairment caused by the injuries, and the impact on the victim’s future. Our legal system strives to put the victim in the same position they would have been in, but for the accident, compensating their losses to the extent that money can do so. Therefore, the greater the negative impact caused by the victim’s ongoing impairments, the larger the likely settlement or award. 

In fact, a plaintiff cannot recover any amount for pain and suffering in a lawsuit in Ontario until they prove that they have suffered a permanent and serious functional impairment. Other heads of damage that can be proven include income loss, future care costs, and cost of housekeeping and home. 

Pain and Suffering

Damages in a lawsuit are divided into two categories: pecuniary and non-pecuniary (or “general” damages). 

Pecuniary damages (see below) compensate the plaintiff’s actual and potential monetary losses; they can be calculated or estimated with some precision. However, our legal system also recognizes the impact permanent, serious impairments can have on their quality of life – including pain and suffering, impaired relationships, diminished social and recreational opportunities. There is no scientific way to assign a value to these “non-pecuniary” losses. Therefore, the courts have established a maximum value awarded only in the most severe cases (currently, it is approximately $418,000). All other cases are evaluated based on the relative severity of the impact on the plaintiff’s life. In settlement discussions, the range of non-pecuniary damages is usually determined by comparing awards from decided lawsuits with similar facts. At trial, juries assign a value based on the evidence at trial. 

Pecuniary Damages

Income Loss

Whereas non-pecuniary damages are arbitrarily capped, pecuniary damages are limited only by the specific life circumstances of the plaintiff and the funding required to meet their demonstrated future needs. 

Income loss covers actual losses suffered by plaintiffs who were earning an income until the claim is resolved, and future losses for periods when the plaintiff is unable to work to their pre-accident levels or at all. Since it is tied to the plaintiff’s own present and future earning potential, income loss claims usually rely upon an accountant’s calculations and report, as well as opinions from various experts about the impact of the plaintiff’s impairments on their future employability. 

There are two other employability-based heads of damage that can also impact the amount of compensation a plaintiff can receive. The first is Loss of Competitive Advantage (LOCA). A plaintiff can still receive compensation for LOCA, even if they are able to return to their previous occupation by the time the lawsuit is resolved. Briefly, LOCA damages are awarded to recognize the greater likelihood that a worker with ongoing physical, cognitive, or psychological impairments will be passed over for promotions, will be laid off or terminated, or will experience extended periods when they are unfit to work in the future, compared to someone without these impairments. LOCA claims are “ballparked” and are usually relatively modest in value. 

The second is Loss of Earning Capacity. Loss of earning capacity claims take account of the plaintiff’s likely employment trajectory, but for the accident, and compare it to the actual or likely future facing them.

Examples:

A child suffers a traumatic brain injury in a car accident. The child’s impairments are severe enough that they will never work competitively. There is no “income loss” because the child had no employment history at the time of the accident. Instead, experts create reasonable scenarios based on factors like the child’s aptitudes and academic progress, or the parents’ level of education and chosen careers, allowing them to forecast reasonable employment trajectories, and calculate the child’s earning capacity.

A student is employed at a fast-food restaurant full-time in the summer while attending university with the goal of becoming a high school teacher. They suffer a similarly severe brain injury and can neither complete the required schooling, nor ever return to work. Assuming that it can be shown convincingly that, but for the accident, the student would have become a teacher, it would be unfair to base their damages for income loss on the earnings from the restaurant job, since they have lost the earning capacity of a high school teacher. 

Future Care Costs

Despite proper treatment and rehabilitation, many accident victims will require ongoing assistance because their physical, psychological or cognitive impairments expose them to harm or render them incapable of caring for themselves safely.  A given victim might need be support across a wide range – from relatively infrequent “check-ups” making sure they are following established routines, to 24-hour in-home attendant care. Future care costs are often the largest portion of the overall award or settlement and can reach millions of dollars. 

Once liability has been established, the defendant will be responsible for paying the costs of all future care proven at trial or accepted in settlement discussions. The value of future care costs is calculated based on Occupational Therapy and other expert opinions. Typically, the defendant will commission reports as well, presenting a lower-value assessment based on the available evidence.  At trial, the jury can accept either of the parties’ assessments, or can arrive at its own figure based on the available evidence. These reports are frequently also necessary when the claim is resolved by negotiated settlement. Prudently invested, the future care award can help provide for the plaintiff’s needs long-term. 

Housekeeping and Home Maintenance

Loss of housekeeping and home maintenance (HKHM) capacity is one of the most common (if less obvious) types of compensable damage suffered by many accident victims. Quantifying this loss takes account of the degree to which the plaintiff can maintain their current home environment given their ongoing impairments, how long they likely will require assistance, and any future changes that could impact the analysis (for example, the plaintiff’s children moving out, normal effects of aging or the progressive deterioration of the plaintiff’s condition). As with other claims for damages, the size of an HKHM award or settlement will depend on the severity of the plaintiff’s functional impairments. 

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Given the complexities involved in assessing the value of legal claims, the inflated, off-the-cuff promises thrown around by some lawyers are misleading and potentially dangerous. Many injury victims, assured that they will ultimately receive massive payouts, overspend on credit and high-interest loans, only to discover that their case is worth far less than they were told. 

When you have been seriously injured in a car accident, understanding the reasonable range of your potential compensation can provide peace of mind and enable you to make smart choices for your future. At Campisi LLP, we are pleased to provide a free, no-obligation consultation to discuss all aspects of your lawsuit, including the range of values you might reasonably expect, fault and liability issues and your accident benefits claim so that you can make informed decisions concerning your recovery and future. Please do not hesitate to contact us with questions and concerns, or if you need a second opinion about your potential lawsuit.