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 Florida's laws and their effects on economic damages.
According to Florida statute 768.81, economic damages are defined as "past lost income and future lost income reduced to present value; medical and funeral expenses; lost support and services; replacement value of lost personal property; loss of appraised fair market value of real property; costs of construction repairs, including labor, overhead, and profit; and any other economic loss that would not have occurred but for the injury giving rise to the cause of action.
There are no limits on economic damages or non-economic damages such as pain & suffering in Florida. However, punitive damages are capped to 3 times the amount of compensatory damages (economic damages) or $500,000, whichever is greater.
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 had the injury not occurred. 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.
In Florida injury cases, economists often assume injured plaintiffs mitigate damages from lost earnings if and when they have returned to work.
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.
In Florida death cases, the taxes that likely would have been paid by the decedent are deducted from lost net accumulations and lost support. Whereas in injury cases, taxes should not be deducted from economic damages to earnings capacity.
According to Florida’s Wrongful Death Act, survivors of a decedent may recover lost support and net accumulations. Net accumulations are the part of the decedent’s income that the decedent probably would have retained as savings and left as part of their estate had they lived to their normal life expectancy. Support includes contributions in kind as well as money, and is the decedent’s expected income less taxes, personal expenses, and net accumulations to the estate. Financial support and net accumulations are commonly calculated as the expected earnings and monetary benefits less taxes and personal consumption.
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.
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 sources refer to benefits received due to the injury from independent third parties. Florida’s collateral source rule requires the potential award be reduced by collateral sources, with the following exceptions: Any amount paid by the plaintiff to obtain the collateral benefit; Benefits for which subrogation rights and reimbursement requirements exist; Benefits from government sources, such as Medicare, Medicaid, and Social Security; and Life insurance payments.