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Noneconomic Loss

Definition - What does Noneconomic Loss mean?

Non-economic damages or losses are compensation provided to an injured party after a personal injury for pain and suffering, emotional distress, loss of consortium, and other intangible injuries.

Unlike economic damages, which can be more easily calculated, non-economic damages have no direct economic loss and have no precise value. Critics of the current tort liability system argue compensation for non-economic loss "is the single greatest contributor to the inequities and inefficiencies of the tort liability system."

Why are non-economic damages for non-economic loss important?

Although many are critical of the current system for compensating injured victims, it is hard to argue with the idea that some of the greatest loss suffered due to an injury may not be the ability to earn money but the loss of the enjoyment of life or the pleasure and satisfaction of living.

When an injured person suffers emotional loss, disfigurement, or disability they may face mental anguish, anxiety, and often shame because they are no longer an able-bodied working person respected for their accomplishments and contributions but now have to rely on other people to care for them. Unfortunately, this loss cannot be monetarily quantified.

Limits on non-economic damages

Many states have started instituting caps on non-economic recovery. States which have passed these laws now limit the amount a plaintiff can recover for non-economic damages including compensation for pain and suffering, emotional distress, loss of consortium, companionship, and other intangible injuries. These limitations do not affect recovery for economic loss such as past and future medical bills, expected lost wages, and property loss.

For example, the state of Alaska has lowered the limit on non-economic damages in medical liability cases to $250,000. The state of California has limited the payment of non-economic damages in medical liability cases to $250,000. Wisconsin limits the award of non-economic damages in medical liability cases to $350,000, indexed for inflation.

Calculating non-economic loss compensation

If you have been injured due to the negligence of another person and have suffered non-economic loss it is time to talk to an injury lawyer. Calculating non-economic loss can be difficult. Generally, if you are negotiating a settlement with the insurance company they will calculate pain and suffering by using a multiplier, which means they will calculate the economic damages and multiply that amount times a specific factor.

What if you take your injury claim to court? The jury will not use a multiplier but will instead use more subjective factors such as whether they understand your loss and injury, whether they like you, whether they think you are telling the truth, and whether you have a criminal record.

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