Calculating Economic and Non-Economic Damages in a Wrongful Death Case
No amount of money can ever replace a person.
In the wake of a wrongful death, this is a truth that grieving families know all too well. The legal system, however, is tasked with the difficult challenge of providing justice in the only way it can: through financial compensation, known as “damages.” Understanding the types of wrongful death damages available and how they are calculated is a critical step in ensuring your family’s long-term financial security after a devastating loss.
The purpose of a wrongful death settlement or verdict is not to assign a value to your loved one’s life. Rather, it is to compensate the family for the full scope of their losses—both the tangible, calculable financial losses and the profound, intangible human losses. This article will provide a clear breakdown of how economic and non-economic damages are determined in a Colorado wrongful death case, so you can be prepared for the process ahead.
The Two Pillars of Compensation: Economic vs. Non-Economic Damages
Colorado law divides wrongful death damages into two primary categories. Think of them as two pillars that work together to support a family’s financial recovery.
- Economic Damages: This pillar represents the measurable, out-of-pocket financial losses that the family has suffered and will suffer in the future due to their loved one’s death. These are losses that can be calculated with a reasonable degree of certainty using documents like pay stubs, tax returns, and expert financial analysis.
- Non-Economic Damages: This pillar represents the intangible, human losses. While these losses don’t come with a price tag, they are very real and deeply felt. They include the emotional pain, grief, and loss of companionship that result from the death. While harder to quantify, the law recognizes their immense value.
A comprehensive wrongful death claim meticulously builds and proves both types of damages to ensure the final compensation truly reflects the family’s total loss.
A Deep Dive into Economic Damages: Quantifying the Tangible Losses
Calculating economic damages requires a detailed and forward-looking financial analysis. It is far more than just adding up recent bills. The goal is to project the full financial impact of the death over what would have been the deceased person’s natural lifetime.
This process often requires the expertise of a forensic economist, who can analyze data and provide expert testimony to establish the true value of these losses.
Lost Income and Earning Capacity
For most families, this is the largest component of economic damages. We must calculate the total amount of money the deceased would have earned over the remainder of their career. This calculation includes:
- Salary and wages
- Projected raises, bonuses, and commissions
- Lost opportunities for promotion
- The value of their own business, if they were an entrepreneur
The economist will use factors like the deceased’s age, education, career trajectory, and industry data to project these future earnings, and then adjust that total to its present-day value.
Loss of Benefits
Wages are only part of a person’s total compensation. A thorough calculation must also include the value of lost employment benefits, which can be substantial. This includes:
- The value of health insurance coverage for the family
- Lost retirement contributions, such as 401(k) or pension matching
- Life insurance and disability insurance provided by the employer
Medical Expenses
If your loved one required medical care between the time of their injury and their death, the costs of that care are recoverable as economic damages. This includes expenses for ambulance services, emergency room treatment, hospital stays, surgeries, and any other medical bills incurred as a result of the defendant’s negligence.
Funeral and Burial Expenses
The reasonable costs of a funeral, burial, or cremation are also included in the economic damages portion of a wrongful death claim.
Loss of Household Services
This is an often-overlooked but significant category of economic damages. It represents the monetary value of the services the deceased provided to the household. This could include childcare, cooking, cleaning, home maintenance and repairs, financial management, and transportation. An expert can assign a value to these services based on the market rate to hire someone to perform them.
Understanding Non-Economic Damages: Valuing the Human Loss
This is, in many ways, the most challenging part of a wrongful death claim. How do you place a value on grief? How do you compensate for the loss of a spouse’s love or a parent’s guidance?
While there is no formula, the law allows for substantial compensation for these profound human losses. Non-economic damages in a wrongful death case are meant to compensate the surviving family members for their own personal suffering, which can include:
- Grief and sorrow
- Loss of companionship
- Loss of comfort, care, and guidance
- Emotional pain and suffering
Jurors are asked to use their life experience and judgment to determine a fair and reasonable amount for these damages. An experienced attorney’s job is to paint a vivid and honest picture of the deceased person—who they were, what they meant to their family, and the immense void their absence has created.
The Colorado Cap on Non-Economic Damages
It is very important to understand that Colorado law places a cap, or a limit, on the amount of non-economic damages that can be awarded in most wrongful death cases.
Under Colorado Revised Statute § 13-21-203, there is a statutory limit on damages for “solatium,” which is the legal term for compensation for grief and sorrow. This cap is adjusted periodically for inflation. As of the latest adjustments, the cap is set at $642,180.
However, the law does allow this cap to be exceeded if the court finds by “clear and convincing evidence” that a higher award is justified. This is a higher burden of proof than the standard “preponderance of the evidence” used for most of the case. Presenting a compelling case to exceed the cap requires significant legal skill and a deep understanding of your family’s story.
What About Punitive Damages?
In some rare and egregious cases, an additional category of damages may be available: punitive damages.
Unlike economic and non-economic damages, which are meant to compensate the family, punitive damages are intended to punish the defendant for extreme misconduct and deter similar behavior in the future.
Under Colorado law (C.R.S. § 13-21-102), punitive damages can only be awarded if it is proven beyond a reasonable doubt that the harm was attended by circumstances of “fraud, malice, or willful and wanton conduct.” A “willful and wanton” act is one performed with a reckless disregard for the health and safety of others. A drunk driver who causes a fatal accident after having multiple prior DUI convictions could be an example. In Colorado, the amount of punitive damages awarded generally cannot exceed the amount of actual damages awarded.
Final Takeaway: Ensuring a Full and Fair Valuation
Calculating the full measure of damages in a wrongful death case is a complex and deeply personal process. It requires not only financial and economic expertise but also a compassionate understanding of your family’s unique loss. Accepting an insurance company’s initial low offer without a thorough analysis of both economic and non-economic damages can mean leaving millions of dollars on the table—money your family needs and deserves for a secure future.
An expert legal team will work tirelessly to ensure that every loss, both tangible and intangible, is identified, valued, and powerfully argued. Your focus should be on your family. Let us focus on the fight for justice. Call Flanagan Law now at 720-928-9178 for your free, no-obligation consultation.
Sources & Further Reading
- Colorado Revised Statutes, C.R.S. § 13-21-203. Limitation on damages. This is the key statute that outlines the types of damages available in a wrongful death case and establishes the cap on non-economic damages.
- Colorado Revised Statutes, C.R.S. § 13-21-102.5. Limitations on damages for noneconomic loss or injury. This statute provides the general framework for non-economic damages caps in Colorado civil cases.
- Colorado Revised Statutes, C.R.S. § 13-21-102. Exemplary damages. This statute governs the awarding of punitive (or exemplary) damages in Colorado, including the high standard of proof required.
- The Colorado Office of the Secretary of State. This office periodically publishes the inflation-adjusted certificate for statutory limitations on damages, providing the current cap amounts.
Frequently Asked Questions
1. Is a wrongful death settlement taxable? Generally, no. According to the IRS, compensation received on account of physical injuries or physical sickness, which includes wrongful death claims, is not considered taxable income. However, any portion of a settlement specifically designated for punitive damages may be taxable. It is always wise to consult with a financial professional about the tax implications of your specific settlement.
2. How do you prove future lost income for someone who was self-employed? This is a complex calculation that requires expert analysis. A forensic economist will review business records, profit and loss statements, tax returns, industry trends, and client lists to build a projection of the business’s future growth and the owner’s likely earnings. This is a critical component for cases involving business owners and high-net-worth individuals.
3. Does the non-economic damages cap apply to each family member? No. The statutory cap on non-economic damages in a wrongful death claim applies to the entire case, not to each individual heir. The total amount awarded for grief, sorrow, and loss of companionship to all family members combined cannot exceed the cap, unless the standard for clear and convincing evidence is met.
4. How does an attorney present evidence of non-economic damages? This is done by telling your loved one’s story. We use photographs, videos, and heartfelt testimony from family, friends, and colleagues to show the jury who the person was and the impact of their absence. We demonstrate the loss of guidance for a child, the loss of companionship for a spouse, and the deep sorrow felt by the entire family. Contact us to discuss your case and learn how we can help you.
