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Figuring out the value of a claim

One of the main functions of a personal injury lawyer is figuring out how many dollars are required to fairly compensate the client.  I call it quantifying the claim.

In this context, fair compensation means the amount of money that would be awarded by the Court if the claim was taken to trial.  Essentially, quantifying the claim means predicting the trial result.

We don’t look into a crystal ball to predict what the Court would award.  It is a very logical and analytical process.

As I’ve noted in previous posts, the goal of the Court is to put the crash victim in the position he or she would have been in had the crash not occurred.   The only tool the Court has to achieve this objective is money.

The Court will look at each of the things the crash victim has lost, and will assess the value of each of those losses.  The trial judgment will be the sum total of those values.

When quantifying a claim, a personal injury lawyer looks at how the Court has valued similar losses in decided cases, and applies those same methods to the file being quantified.

What are the losses that crash victims typically suffer?

The financial losses that nail you in the pocket book are the most obvious.  Lost income from missing work is one of those.  Another is the expense for treatments.

While these losses are obvious, putting a value on them is not simply a matter of punching them into a calculator.  There are many considerations.

For example, an insurance adjuster might tell you that you are not entitled to dollar for dollar compensation for income loss because an amount needs to be deducted for income tax.  This happens to be a “hot topic” in our laws and may simply be inaccurate, depending on the case.

Further, what about compensation for the sick bank you used up?  What about the pension contributions you weren’t able to make?  What about the other financial losses you suffered because you didn’t have that income in hand, such as credit card interest?

As simple as treatment expenses might seem to be, you will be under-compensated if you do not add your mileage to attend those treatments.  I challenge you to find an adjuster who will mention that little tidbit to you.

What about the less obvious losses?

If you are physically unable to work for a period of time, then you are likely also physically unable to do heavier housekeeping or yard duties.  If you hire someone to help you with that, you are entitled to be reimbursed for that expense.  If a friend or family member picks up the slack for you, you are entitled to recover reasonable compensation to pass on to that friend or family member.

Anyone who has not achieved a complete recovery from crash injuries needs to look seriously at an entitlement to compensation for their reduced earning capacity.  This is the case even if the person has soldiered on and not yet lost any income.  Will they be able to continue soldiering on until they’re 65?  Are other career opportunities now lost?  Will they be a less attractive hire beside someone who does not have chronic pain?

The loss of income earning capacity is often the largest part of a claim, though it is one which many people negotiating directly with the insurance company don’t even consider.

How about future care needs?  Perhaps you are able to work through the pain to look after your housekeeping today, but what about 10 years from now?  Is there a progressive deterioration of your spine arising from the crash that needs to be considered?

The biggest puzzle for people seems to be a valuation of the lost enjoyment of life due to crash injury pain and limitations.  It is tricky to determine what the Court would due in your particular case, because there are many factors that the Court considers.  Identical injuries can result in very different valuations, depending on the level of impact those injuries have on a person’s life.

Trying to compare decided cases with your case is a very dangerous thing to do if you do not know what you are doing.  A case that may seem comparable may not be comparable at all.  Insurance adjusters are good at finding cases with unusually low awards and using them to try to convince unrepresented claimants that their claims are worth less than they really are.

I hope to accomplish two things with this posting.  De-mystifying the quantification of a claim is one of them.  The other is a warning not to try to quantify your claim without legal advice, and certainly not to rely on an insurance adjuster to do it for you.

Published July 29, 2007 in the Kelowna Capital News