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Compensatory Damages

Compensatory Damages - Law 101

Hello, I'm attorney Kyle Bachus. The legal world is full of overly complicated jargon and terminology that can be intimidating if you don't know what it means. In my law 101 video series, I'm breaking down some commonly used legal terms so you can be informed and confident should you ever need to take legal action.

In this episode of law 101, we're going to break down the legal term damages.

In other videos, we talked about torts, and we talked about the tort of negligence. And if somebody acts unreasonably towards you, and they cause harm to you, those harms that are caused are what the definition of damages means. Damages are harms and losses and injuries that result legally as a consequence of somebody else's conduct, their negligence. We have different categories of damages under the law.

One of our categories of damages is called economic losses or economic damages. And these are lost wages, medical expenses, out of pocket expenses, co-pays, deductibles, any over-the-counter expenses that you might have, any future wage loss and any loss of future earning capacity. All of these are economic damages. It's like you could come up with a bill for them, you could actually demonstrate them, and they’re very tangible.

The second category of damages is called non-economic damages. So we have economic damages, these tangible damages we just discussed, and then non-economic damages. These are the more amorphous type of damages. Non-economic damages are pain, suffering, loss of enjoyment of life, physical impairment, disfigurement. These are damages that you can't go look up a price for, right?

But in every state, you're entitled to recover both economic damages and non-economic damages. Now you might have heard in some states that they have caps on damages. Caps on damages are where the legislature comes in and says, we're going to put a top or a ceiling on the maximum amount that you can recover for one or more categories of damages.

Most states, if there is a cap on damage, the cap on damage only applies to the non-economic damages. The pain, suffering, loss of enjoyment of life. Which is interesting from our perspective, because in many cases, the wage loss, those things, although real, the more catastrophic damage to a person is the suffering that they have to endure. But the legislators and many states have adopted these caps on damages. In Colorado, we have a cap on non-economic damages that's a little over half a million dollars is the maximum that you can recover for non-economic damages. But interestingly, our legislature put no cap on two components, physical impairment and disfigurement. No cap on physical impairment, no cap on disfigurement.

So when we're analyzing for our clients, non-economic damages, we want to make sure that we characterize and locate the physical impairment and disfigurement damages, because those aren't capped in serious cases. Both categories of damages that we have just talked about, the economic damages and the non-economic damages, those damages are designed to compensate the injured person. They're not to be a profit center for the injured person. They're supposed to bring the injured person back to Ground Zero.

All of these damages are what we call compensatory damages. If you have a question about damages that you sustained as a result of somebody else's conduct, if you believe that they acted unreasonably and have caused you to incur damages, and you have questions about those damages, we're happy to talk with you personally about that at Bachus & Schanker. To learn more about other law topics that can help you feel informed and confident about the law, make sure to check out more videos in this series.

Check Out More Videos In Our Law 101 Series

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