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How Do You Calculate Pain and Suffering in a Settlement?

Posted in pain and suffering, Personal Injury on July 13, 2016

A fair settlement can provide your family with compensation to pay for medical bills, make up for lost wages due to missed work, and other expenses associated with daily living. Many personal injury claims also include what’s known as “pain and suffering” costs. What are these, and how do personal injury attorneys calculate them? Most personal injury claims hinge on the plaintiff providing evidence of negligence. Negligence is a term the legal system uses to describe actions in which one person fails to exercise reasonable care around another. When a person commits negligence, he or she may cause another person pain and suffering.

Pain and Suffering Defined

Lawyers use the term “general damages” to define any intangible losses, like pain and suffering, as part of an injury settlement. But how can you quantify your pain? It’s hard to pin a number on, but lawyers use a specific system to calculate the economic and general damages associated with a settlement. The two most common are the multiplier method and the per diem approach.

The Multiplier Method

The multiplier method refers to a process by which an actuary takes your economic damages (these are easy to calculate and include things like lost wages and medical bills) and multiples them by a number as small as 1.5 and as large as 5. An actuary might multiply the number by 5 in the case of gross negligence, for example, but will use a smaller number if the injuries are minor. Other factors that affect the multiplier are your likelihood for a speedy and complete recovery as well as the impact on your daily activities. The multiplier method is the most common form of calculating general damages, as it’s the same process most insurance companies use. Often, the sticking point in the negotiation phase is the multiplier used to calculate general damages. An experienced law firm can help you maximize your settlement by fighting for a fair multiplier.

The “Per Diem” Calculation

Less common is the “per diem” method of calculating pain and suffering. This process gets its name from the Latin phrase meaning “each day.” It relies on demanding a certain dollar amount for every day you experience pain as a result of your accident. This approach is less common because attorneys often disagree on the appropriate way to set a dollar amount for each day of suffering. If you miss a significant amount of work as the result of your accident, the best approach may be to use your daily earnings as a starting point. Say, for example, you were involved in a car accident and experienced a fractured arm as a result. You wore a cast for six weeks and took pain pills each day to alleviate your suffering. Even after your cast is off, you continue to experience pain for another month, for a total of 75 days of suffering. Say you make $35,000 a year—approximately $95 per day. Your per diem settlement would be around $7,2000. This method is fine for clear cut cases, but when it comes to long-term injuries, permanently disabling conditions, or lost earning capacity, this calculation falls apart. For this reason, the legal profession more commonly relies on the multiplier calculation.

Have You Been Injured in an Accident?

If you’ve been injured as a result of someone else’s negligence, you may be wondering about the recourse for the parties responsible or wondering how to pay for your medical bills. The Attorneys at Aaron Herbert are skilled at negotiating settlements that are fair, given the extent of your pain and suffering. To start your personal injury claim today, contact our office for a free case evaluation. We offer our services on a contingency-fee basis, so there’s no risk to you.