Economic vs. Non-economic Damages: Everything You Need to Know

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Finding yourself or your property damaged as a result of another person or organization’s actions is a frustrating and concerning experience. Many people often resign themselves to not pursuing justice when this occurs, as they feel it may not be worth the headache of dealing with and understanding the legal system. 

However, a person who does not take action will potentially be leaving money on the table that they could otherwise earn from simply choosing to contact a lawyer who specializes in the topic of their case. This amount of money potentially left on the table refers to something known as damages, of which there are two primary types: economic and non-economic. Learning the difference between these two can help a person start to understand what they can garner by pursuing their case in court. 

What Are Damages? 

First and foremost, before diving into the specifics of the difference between economic and non-economic damages, it’s crucial to look at what exactly damages are. As outlined by Cornell Law School, in a civil lawsuit damages are a remedy that one party requests the court order the other party to pay in order to make the requestor whole. 

Damages can either be compensatory or punitive in nature. Compensatory damages are those which seek to make the person requesting the damages whole by actually calculating what they are owed. Punitive damages, on the other hand, are those which are meant to punish the defendant, with a common example being fines. 

Economics vs. Non-Economic Damages

Going into this topic a little deeper, damages can be further broken down into economic or non-economic damages. While it may seem evident from the name what the primary difference is between these two types, it is more complicated than it actually seems. At its core, however, economic damages are those which directly represent the financial losses a person suffered or those which impacted a person’s property, whereas non-economic damages tend to not have a measurable monetary value.

Common Types of Economic Damages

Starting with the more common type, the components of economic damages in a claim will revolve around the following damage types. 

  1. Medical Expenses

First and foremost, the common type of economic damages that a person will see are medical expenses. These are the direct costs of medical treatment following an accident where a person is injured and could include surgery expenses, the cost of medicine, or other similar costs. They are determined, typically, by using receipts provided by healthcare offices or hospitals. 

  1. Physical Therapy Expenses

For accidents or situations where a person is required to go through physical therapy treatment in order to reach the same level of livability as prior to the accident, the costs may be covered with economic damages. As with medical expenses, the monetary value for this will be determined based on provided receipts. 

  1. Lost Wages

Another common type of measurable economic damage is that of lost wages. This type refers to the event where a person is not able to return to their job for some period of time due to whatever occurred. The salary that they lose out on as a result is known as lost wages and may be ordered to be repaid by the party who caused the incident. 

  1. Potential Travel Expenses

Finally, if a person needs to travel somewhere for treatment or as a result of the incident which occurred, it’s possible that their costs associated with the travel will be covered. 

Common Types of Non-economic Damages

Moving on to the second form of damages that a person may deal with, non-economic damages are a little more complex and tend to arise in situations where a physical injury may or may not have occurred: 

  1. Pain and Suffering

Pain and suffering damages are similar to medical expense damages, though they are not as measurable. These types of damages often refer to mental anguish or non-measurable physical pain that a person experiences as a result of the incident they went through, with the court deciding on a general monetary value in most cases. 

  1. Disability and Impairment Costs

In the event a person has become partially or totally disabled due to the situation, the court may require the defendant to pay ongoing costs for that person’s treatment or general items related to their new livelihood. 

  1. Long-lasting Mental Anguish and Trauma

Similar to damages related to pain and suffering, long-lasting mental anguish or trauma from the incident, such as PTSD, may fall under non-economic damages. For example, if a car accident were horrific enough that a person needs to go through therapy just to try and attempt to get in a car again, or if they are unable to drive due to their PTSD, then this type of non-economic damage may be awarded. 

  1. Reputational Damage

Finally, typically seen in contract law, reputational damage might be made whole through the awarding of non-economic damages. This type of damage refers to when a person’s general reputation has been slandered as a result of what has occurred, and they have suffered some type of loss as a result. This loss is often not measurably, rather it is looked at from a reputational standpoint. For example, if a person accused a small business of poisoning food, which was later disproved, yet no one eats at the location anymore due to the stigma, the reputational damage may be grounds for awarding non-economic damages to make the restaurant whole. 

Nobody should build a legal defense all on their own, which is why it’s always best to contact an accredited lawyer who can assist you with your case. This lawyer can help you understand the nuances of the legal system all while guiding you through what occurred when you or your property were damaged. Focus on building an adequate legal defense that sets you up for success in the court room.

Also Read: For Comprehensive Services On Diverse Legal Cases Approach A Personal Injury Lawyer!


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