Damages Lawyer Manual

Calculating damages

How to calculate damages is more an art than a science. For injuries, there is an age-old unwritten rule of three times specials. Specials are the medical bills, and sometimes specials include lost time for work. Here’s where that three times idea comes from one time to pay the bills, one time for the plaintiff’s pain and suffering, and one time for the attorney’s fees. But defendants, meaning the insurance companies which defend these claims, tend to discount and balk at this rule. Defense attorneys are looking to attack whether the accident actually caused any injury and closely scrutinize the necessity of the treatment and the reasonableness of the bills. But the value of a claim is certainly going to be measured against the medical bills, lost income from missed work, car rental expenses, repair bills, or the value of a totaled vehicle. Then there is the consideration for the more intangible or non-calculable damages like pain, suffering, permanency of injury, scarring and death.

Prejudgment Interest

Often damages are not awarded to the plaintiff right away. To compensate the plaintiff for the loss of the ability to use the funds, they may receive prejudgment interest in some cases. In Illinois, plaintiffs may collect prejudgment interest on cases of wrongful death, negligence, willful and wanton conduct, or strict liability.

They can recover this prejudgment interest on all damages except punitive, sanctions, statutory attorney's fees, and statutory costs. However, plaintiffs can't recover this prejudgment interest from state or local government parties. Prejudgment interest accrues from the time the action is filed to the time of the judgment. Prejudgment interest can't accrue for more than 5 years.

Reimbursing health insurance provider

If a private health insurance company pays for medical care provided pursuant to the accident, that insurer will have a 100% contractual interest in what it has paid. The insured is contractually obligated under most private policies to reimburse the insurance company out of any settlement or award of damages. Therefore it behooves any plaintiff or attorney to negotiate with the health insurance provider to give up its rights in exchange for payment out of any settlement or award of damages and hopefully compromise the amount it receives. Insurance companies are willing to accept compromise payments – money in hand now through a settlement, rather than waiting for the outcome of litigation.  

Medical liens

When an injured party receives treatment, the medical provider has a lien for any unpaid portion of its bill against the injured party’s claims for damages.

Liens can be both the plaintiff’s and the defendant’s hurdle, particularly in settlement negotiations. The Healthcare Services Lien Act limits the recovery of these lien holders. 770 ILCS 23/ The Act creates two categories of health care services: healthcare professionals – which would be individuals like doctors and dentists and healthcare providers – which would be an entity like a hospital or treatment center. The total liens from both categories of lien holders cannot exceed 40% of the plaintiff’s recovery. Also, no individual category of lien holder can receive greater than 33% of the recovery. If the total liens are greater than 40%, then each category of the lien holder is capped at 20% of the plaintiff’s recovery.

The Healthcare Services Lien Act also affects attorney’s liens. If the total liens are greater than or equal to 40% of the recovery, the total amount of attorneys’ fees cannot exceed 30% of the plaintiff’s recovery. The attorneys’ fees section does not apply if an appeal is taken by either party. We should also note that nothing in the Act limits healthcare providers or professionals from pursuing collection of its reasonable charges for the services rendered to an injured. Therefore, it looks like a contract action remains for lien holders to recover remaining amounts due.  

Finally, both Medicare and Medicaid also have lienholder interests in injured parties’ recoveries. Medicare is similar to other medical liens but will have priority. Medicaid is more restricted, and the lien is only on the recovery of medical expenses, and not on other elements of damages like lost wages.