Dealing with Non-Pecuniary Damages

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Non-pecuniary damages address pain and suffering. This compensation is meant to compensate a claimant for their experiences following an accident. These experiences include loss of life expectancy among others. Non-pecuniary damages involve an indefinite assessment of the amount of money required to compensate one for loss of enjoyment of life.

In essence, the award for non-pecuniary damages is given on a case by case basis. Usually, the court will not only look at the nature of the injury, but also its impact on the complainant. With pecuniary damages, the court will assess the material cost of one's injuries before awarding damages.

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Types of Non-Pecuniary Damages

Some of the common types of non-pecuniary damages include:

  • Emotional distress: Awarded for severe injuries that cause anxiety attacks, depression, or any form of emotional damage
  • Impairment of life: This implies that the quality of life that a person was accustomed to being reduced by the injury
  • Impairment of mental or physical abilities: This implies that the injury has caused a disability that caused the injured party to lose their intellectual and physical strengths
  • Impairment of relationships: This is where an injury has negatively impacted the complainant's marital, social, and familial relationships
  • Loss of expectation of life: This is where the complainant's average life expectancy is reduced due to his/her injury

Single Assessment for Non-Pecuniary Damages

Since assessing damage awards for pain and suffering is inaccurate, courts normally award a lump sum for all pain and suffering. This means they do not offer separate amounts for separate features of non-pecuniary loss. As witnessed in the case of Andrews v. Grand &Toy Alberta Ltd., 1978, it is common practice to award a single figure for all non-pecuniary loss. This includes factors like loss of amenities, pain, and suffering, loss of expectation of life, among others.

Although these features are distinct, they merge in practice because when one suffers pain, in essence, they have lost an amenity of a happy and fulfilling life. When one loses years of their expectation of life, they have lost all the amenities associated with that period of time and this causes pain and suffering.

Factors Used To Access Non-Pecuniary Damages

Jeffrey Preszler from Preszler Law explains that calculating non-pecuniary damages, which do not result in direct costs, requires a sophisticated approach. In the case of Stapley v. Hejslet, 2006, the Court of Appeal mentioned the following conditions as necessary when awarding non-pecuniary damages:

  • The Age of the Claimant

If a claimant will have to live long with their impairment, they may be awarded a high non-pecuniary damage award. However, the court also held that certain injuries had a more severe effect on older people than on young people.

  • Financial Circumstances are not Relevant

In the case of Fletcher v. Autocar & Transporters, Ltd., 1968, there is some justification for why financial circumstances are not considered relevant when awarding non-pecuniary damages. The financial circumstances of the plaintiff are also not relevant when assessing the expenses for future care or special damages.

  • The Effects of Injuries on Employment

The courts acknowledge the importance of work to emotional wellbeing. Therefore, employment is not only relevant to loss of earning capacity, past wage loss, or the inability to work. It is also relevant when assessing non-pecuniary damages.

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How Awards for Non-Pecuniary Damages May Be Controlled

People who support public insurance and are opposed to tort liability often focusing on controlling non-pecuniary damages. One way non-pecuniary damages are controlled is through statutory bans on these damages. In many states, there are restrictions for damage awards for particular torts. There are also a few federal bills that have proposed restrictions in certain cases. For example, the Asbestos Compensation Fairness Act (2003) where punitive damages were prohibited for asbestos-related cases, or the Health Act (2003), and Common Sense Medical Malpractice Reform Act (2003) that proposed a limit of $250,000 on non-economic compensation for medical malpractice cases.

Another way non-pecuniary damages may be controlled is if producers of goods and services were allowed to state how much they would pay for accidents arising from their products or services. While this would lower the price for these products or services due to the low cost of the risk associated with offering these products or services, it would ultimately eliminate non-pecuniary damages for specific goods and services .In essence, consumers would be choosing low priced products or services without regard to the risk factors associated with utilizing these amenities. The result would be a high consumption rate for these low priced products and services.

The other approach to reducing pecuniary damages is unlimited insurance subrogation. Under such terms, an insurance company is entitled to collect the entire damage award given to the injured party for an injury covered by the insured's policy. Currently, there is the limited insurance subrogation that only entitles the insurance company to collect a fraction of the damage award. Since insurance companies would gain huge returns from the unlimited insurance subrogation plan, their insurance rates would drop and consumers would ultimately find it pointless to invest include non-pecuniary damages in their policies. As a result, many consumers would allocate more money towards pecuniary damages. This would affect consumers in the sense that they would be exposed to a high risk of injury and would have no way of holding people accountable for their liability for these injuries. However, it would be a plus for insurance companies since they would collect non-pecuniary damage awards.

Non-pecuniary damages are a just way of compensating people for injuries they sustain that go beyond the general damages. Many injuries leave permanent scars and it is only fair for the victims to be compensated accordingly through non-pecuniary damages. Capping or eliminating non-pecuniary damages would increase negligence and lead to a high rate of accidents. It would be unfair to consumers of products and services. The better way of controlling non-pecuniary damages would be to cap or eliminate compensation derived from injuries sustained after using certain products and services and then educate consumers about the risks involved or legal implications. This would leave them to make informed choices.