Noneconomic damages allow injured persons to recover compensation for the emotional and psychological losses they suffer after an accident due to someone’s negligence. However, this type of compensation is naturally difficult to calculate because there are no specific costs for pain and suffering.
For that reason, the courts and insurers rely on two principal methods for determining the value of noneconomic damages.
The multiplier method
A common way of determining the value of damages for pain and suffering is the multiplier method. In this methodology, the insurance company or court multiplies the total economic damages by a number between 1.5 and 5.
The more severe the injuries, the higher the multiplier could be. For example, a case with minimal emotional distress might receive a multiplier of 2. Therefore, if the injured person had economic damages of $20,000, the noneconomic damages would be $40,000.
However, greater emotional distress would merit a higher multiplier. Such pain could result from a disfigurement that caused psychological trauma or a drastic change in lifestyle that robbed the claimant of working in a preferred field or enjoying a lifelong hobby. A multiplier of 4 or higher could be possible in these cases.
The daily rate method
The daily rate method is when the injured party receives a specific amount for each day of enduring wounds or disabilities. To illustrate, if the award or settlement arrived at $150 as the daily rate for pain and suffering and the recovery time was 75 days, noneconomic damages would be $11,250. The daily rate method might yield higher compensation when the claimant clearly understands the healing time from an injury and can negotiate for a higher daily amount.
Caps on noneconomic damages
Generally, there are no caps on noneconomic damages in South Carolina. The only exception is for medical malpractice cases. The limit a plaintiff can receive from a single institution was $545,869 in 2023. If there are multiple liable medical institutions, the amount increases to $1,627,608.
Noneconomic damages are a fundamental way that injured persons can get full compensation after an accident that arose due to someone’s negligence. While money cannot truly compensate for the trauma, it can help injured persons and their families recover from such an event.