Instead, the parties in damages claims may be at odds over questions about the effect or magnitude of the harm done. They may dispute whether or to what extent one party should compensate the other. These are questions about damages.
When one party suffers a loss due to the actions of another party, the party suffering loss may receive monetary damages from the acting party. Typically, a defendant who loses a civil claim owes damages to the prevailing plaintiff.
Damage questions can become complex. This is why attorneys may ask expert witnesses to participate in clarifying key issues related to damages. Here, we’ll explore what experts need to know in order to navigate questions of damages, understand the most common types of damages claims involving experts, and identify the cases to which an expert can add value.
Permissible Damages in Tort and Contract Claims
Damages in tort and contract claims are often differentiated by the type of harm they redress. Broadly, all types of monetary damages fall into one of two commonly-used categories. One is compensatory damages and the other is punitive (or exemplary) damages.
Compensatory damages are those that seek to compensate the injured party for the harm done. The goal of compensatory damages is to place the injured party as nearly as possible to the same position they were in before the harm occurred.
Compensatory damages may be further subdivided into two categories, economic and non-economic damages.
Economic damages are those that one can readily calculate from invoices, receipts, bills, and other forms of evidence. Common types of economic damages awarded in tort and contract cases include:
- Compensation for medical bills related to injury or illness
- Funeral and burial expenses in the case of wrongful death
- Repair or replacement costs for damaged property
- Lost wages incurred from time taken off work to recuperate
- Losses incurred due to a breach of contract
- Any other calculable loss stemming from the act or omission at issue in the lawsuit
In addition, a breach of contract claim may involve special damages. Special damages are actual losses caused by the breach. However, they occur due to special circumstances or conditions that are uncommon, difficult to foresee, or not ordinarily predictable. An award for special damages typically requires the non-breaching party to demonstrate that the breaching party knew of the special circumstances or requirements when the contract was made.
The intention behind non-economic damages is to compensate the injured party for losses. Unlike economic damages, however, non-economic damages don’t typically have a paper trail of invoices and receipts from which to calculate an exact amount. Rather, the court’s or jury’s judgment, counsel’s arguments, and, in some cases, statute direct the amount awarded.
Common types of non-economic damages in civil claims include:
- Loss of care, companionship, and consortium
- Emotional distress or anguish
- Reduced enjoyment of life
- Scarring or disfigurement
- Future lost wages due to an ongoing inability to work
- Expectation damages or losses stemming from reliance on the disappointed expectation the other party to a contract would meet its agreed-upon obligations
Punitive (Exemplary) Damages
Compensatory damages are by far the most common types of damages at issue in tort and contract claims. More rare are claims for or awards of punitive damages.
The court does not award punitive damages, also known as exemplary damages, to address harm or loss. Rather, the court awards punitive damages to send a message that the defendant’s behavior ought not to be tolerated in an organized society.
Punitive damages are not available in every case. State law typically limits the type of claims that may involve punitive damages. Additionally, state law usually limits the amount of punitive damages that the court may award.
Most Common Types of Damages Claims That Involve Experts
Many damages claims are straightforward. For example, there was a smashed vehicle fender or a broken leg in an auto accident. In this case, damages are often established on the basis of car repair bills or medical bills. These types of damage claims rarely need an expert’s input.
Other damage claims are more difficult to establish. Damages claims that may call for an expert’s input include:
- A claim based on loss of business, interference with business relationships, or lost expectations of future business under a contract
- Claims involving financial misbehavior, such as mishandling of funds or faulty bookkeeping
- A claim that focuses on emotional harm or trauma and its ongoing impacts—not only treatment costs but also the impact on relationships and ability to work
- Claims in which the resulting damages amount depends on which method of appraisal or valuation of property is used
In addition, any type of damages claim subject to more than one method for understanding and calculating damages amounts may benefit from an expert’s efforts.
How Experts Can Add Value to a Damages Claim
One calculates most types of damages either according to available financial information or according to standard methods. Nevertheless, an expert can provide value in a damages dispute by understanding and explaining these methods.
Also, experts can add value by examining how one reaches proposed damages amounts. In doing so, the expert may spot current, future, or additional damages not yet accounted for in the claim. This evaluation can quickly raise the value of a damages claim and establish the expert’s value as part of the legal team.