Damages for Wrongful Death

Damages in wrongful death cases are intended to compensate for losses resulting from the death of a family member. Some losses are measurable a widow in a wrongful death suit could seek to recover the financial support that she would have received had her spouse lived. Other damages are more general and abstract in nature.

Types of recoverable damages include:
Direct Expenses: medical bills and funeral cost.
Loss of Companionship: what the person who died would have emotionally provided to a relationship, and the mental pain and suffering resulting from the decedent’s death.
Punitive Damages: what amount the defendant should be punished for his or her action resulting in the victim’s death.
Loss of Benefits: what the person could have received in pension/retirement benefits had they lived.
Loss of Future Earnings: what the person who died would have earned in salary if he or she had lived.

Amount of Damages

Calculating damages is a complex process involving multiple factors. Some factors include (1) how dependent the plaintiff was on the decedent; (2) the nature of the relationship with the decedent; (3) the anticipated lifespan of the decedent, (4) the anticipated earnings and other benefits of the decedent, and (5) the presence of any comparative fault. Often, determining the appropriate amount of damages for a particular element can be difficult. For example, when addressing damages for loss of companionship, a jury must attempt to come up with a dollar amount for the emotional loss you suffered from the decedent’s death.

An important element in wrongful death damage calculations is in estimating expected or future income losses. Future losses are the amount of earnings and benefits the decedent would have earned if he or she had lived. The common practice is to take the victim’s earnings at the time of his or her death and calculate the remaining years until retirement (or expected death) to determine future loss of earnings.

Here is an example: Suppose a spouse, 35 years of age, was earning $25,000 a year at the time of his death. Since he was not expected to retire or die for another 35 years, his yearly earnings at the time of his death would be multiplied by the number of years he was expected to work before retirement or expected death ($25,000 X 35 years). In this instance, his future loss is $875,000.

This is only a simple explanation of how future loss calculations are made; most of the time these calculations can get very complicated. In most cases, a life expectancy table is used to estimate the number of years the decedent would have lived had they survived. Instead of just using retirement age as a standard for life expectancy, a life expectancy table may consider other factors that may increase or decrease the number of years the decedent would have been expected to live, which would then affect the amount of damages you would receive for future loss.

Present Value

When using a life expectancy table to calculate future losses, courts will often reduce the total future loss to a present dollar value. Because most wrongful death damage awards are paid in a lump sum, a beneficiary essentially receives the total amount of earnings and benefits the decedent would have made over the course of his/her life, reduced to a single amount which is discounted to present dollars.

How is present value calculated?

In order to calculate present value, the future loss is first calculated using the life expectancy table. Once the future loss amount is calculated, it is then discounted using a mathematical table. The mathematical table estimates today’s value of one dollar in the future based on the number of years the decedent was expected to live and an agreed upon annual interest rate. After that is determined, the estimate from the table is multiplied by the decedent’s yearly salary.

The purpose for using present value is that a successful plaintiff will receive a sum that, if invested at a reasonable interest rate, should equal the value of the future loss amount and cover expenses that may eventually arise if it is conservatively invested. Unfortunately, figuring out the present value of future loss is not as simple as it first appears.

Here is an example: A spouse works in a department store earning $20,000 a year. Assuming he works there for the next 40 years, he will make a total of $800,000 by the 40th year. The spouse suddenly dies as a result of a wrongful death. The surviving spouse would recover a lump sum payment designed to compensate her for the $800,000 loss, discounted to present dollars.