How economic damages are calculated in Tennessee

The calculation of economic damages involved in personal injury and wrongful death cases differs depending on the state in which the case is filed. In this article, we review Tennessee's laws and their effects on economic damages.

In Tennessee, economic damages are not specifically defined in a state statute. However jury instructions and case law detail many of the economic damages to include:

  • Loss of earnings and earning capacity
  • Loss of income
  • Fringe benefits
  • Loss of retirement income
  • Loss of business profits
  • Medical expenses and medical care
  • Household services
  • Burial costs
  • Other monetary losses

Limits on damages

There are no limits on economic damages in Tennessee. However, there are caps to non-economic damages. Punitive damages are capped to $750,000, unless the injury was catastrophic in nature and the cap then becomes $1,000,000. A catastrophic loss or injury in Tennessee is defined as:

  • A spinal cord injury resulting in paraplegia or quadriplegia;
  • Amputation of two hands, two feet, or one of each;
  • Third-degree burns of 40% or more of the body, or 40% or more of the face;
  • Or a wrongful death of a parent leaving a surviving minor child.

Earnings capacity

Lost wages and income are calculated as the lost earnings capacity of the injured individual. That is, the value of what they were capable of earning over their lifetime. Reviewing a person's historical earnings is often useful when estimating their earnings capacity, but it may not be the only piece of the puzzle. To demonstrate this, let's think of a few examples.

Consider a factory worker who has been employed with the same company for a decade. They may have been in line to receive a promotion to supervisor, or there may be other employers in the area who pay higher wages for similar jobs to the one they held at the time of their injury. In these cases, their historical earnings would not represent the future earnings they could have reasonably been expected to receive had the injury not occurred.

As a second example, imagine a worker who recently graduated high school or college. Workers who enter the labor market and obtain entry level positions generally earn significantly less than what they will receive throughout their career. Therefore, the historical entry level earnings likely do not represent what they could have earned in the future, had the injury not occurred.


Tennessee states that the plaintiff has a duty to mitigate their damages, so long as it does not aggravate the extent of damages suffered. This may include going back to work part-time or finding a new job. This may also include going to a hospital so that the injury does not become more serious.


In addition to the earnings an injured individual is expected to have received, benefits must be included in the calculation of losses. The benefits may include insurance premiums, contributions to retirement, and Social Security contributions. In some cases, other benefits such as meals, day care incentives, and car payments may need to be included.


Taxes are not included in the calculation of economic damages in Tennessee.

Personal maintenance

In wrongful death cases, economic damages are based on what the decedent would have earned, less a personal maintenance deduction. Personal maintenance is the amount of money one spends such that they maintain their health and well-being, capacity to enjoy life's activities, and capacity to earn money.

Medical expenses

Injured persons may recover medical expenses, both those that have already occurred and those expected to occur. Generally, future expenses are detailed in life care plans or medical cost projections produced by doctors and nurses. The future expected costs for these expenses must first be projected, and then discounted to present value.

Household services

Economic damages include the contributions an injured individual would make to their family had the injury or death not occurred. The chores and tasks performed for one's family and around one's house are referred to as household services and may include past and future time periods.

Collateral source

Collateral sources refer to benefits received due to the injury from independent third parties, such as insurance or worker's compensation. In Tennessee, collateral sources do not offset or reduce the economic damages in personal injury or wrongful death cases. However in medical malpractice cases, collateral sources from the non-tortfeasor are treated as an offset to the economic damages.

Shared fault rule

In Tennessee, an injured party may only recover damages if they are found to have less than 50 percent of the negligence which led to the injury. If the injured party is found to have some negligence, then their percentage of negligence is removed from the recoverable damages. For example, if the injured party is found to be 20 percent at fault, then the estimated economic damages would be reduced by 20 percent.