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What are Special Damages?

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  • Written By: Jodee Redmond
  • Edited By: Bronwyn Harris
  • Last Modified Date: 19 November 2016
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Special damages are awarded in a legal action to a person or corporate entity who has been wronged or harmed. Unlike general damages, which are meant to compensate for intangibles such as pain and suffering, this type of compensation is meant to cover out of pocket expenses the plaintiff has incurred. There is always a specific dollar figure being sought in this type of legal remedy.

One of the types of expenses that falls under the category of special damages is lost wages. The injured person is entitled to be compensated for the financial loss he or she incurred while recovering from injuries sustained in an accident. In the case of a person who is disabled and unable to work due to the extent of their injuries, the damage award may contain an amount for loss of future earnings.

Special damages may also be awarded to provide compensation for medical bills and related expenses. These damages may be subject to a subrogation claim by the plaintiff's medical insurance company. This is a standard practice among insurers which exists for their financial protection.

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The plaintiff's health insurer pays benefits under the policy up to its lifetime limits. The company keeps records of the amounts it paid out in connection with expenses incurred as the result of the accident. If the plaintiff is successful in recovering monetary compensation to pay for his or her medical expenses, this portion of the settlement is forwarded to the health insurance company in settlement of its subrogated claim.

This type of claim also comes into play when the special damages are awarded to compensate the driver of a vehicle damaged in an accident for repair costs. The insurer pays out on the policy and if the vehicle owner receives compensation for the same damages from the other driver or his or her insurance company, the owner's insurance company may attempt to recover the amount that it paid out earlier. A policyholder can find a reference to this type of provision in the policy language.

If the compensation being sought is the type that can be supported with a specific dollar value or receipts for money paid out, then it falls under the category of special damages. The court then determines if these expenses were incurred as the result of the defendant's actions or negligence. If so, then the plaintiff may be compensated for the loss.

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Vincenzo
Post 3

@Logicfest -- And that is exactly what trials are for. People want to settle those car wreck cases, but that doesn't always happen. In your scenario, the insurance company may question the methods used by a chiropractor, but will a jury take the same view? In jurisdictions where juries tend to side with chiropractors, you will find that insurance companies are far more willing to accept those bills when settling cases (as an example).

People can win big money in car wreck cases. Getting that cash isn't always easy.

Logicfest
Post 2

@Terrificli -- Who will argue over special damages? Some insurance companies will, especially if some of those damages are considered questionable.

Take that car wreck you mentioned. The driver is injured and knows the other insurance company will pay. His lawyer tells him to run up those special damages because the attorney's plan is to run up those medical bills and apply a multiplier when trying to settle the case to cover general damages too. For example, $10,000 in special damages multiplied by three comes to $30,000 to settle the whole thing. It is a common tactic, after all, to settle matters by applying such a multiplier.

So the injured party heads off to a chiropractor and runs up

a bunch of bills. The insurance company may refuse to recognize those bills, claiming that chiropractors aren't traditional medical doctors and use methods that are not considered valid.

In that example, the injured person may run up a bunch of chiropractic bills that the insurance company refuses to pay. So, yes, people will contest special damages from time to time.

Terrificli
Post 1

These are usually the easiest to prove. Let's say someone is hurt in a car wreck. Medical expenses, lost wages and the cost of fixing the car are easy to establish. Honestly, who is going to argue over those amounts?

If liability is established, the real fight is over general damages. How much is a broken arm worth when measured by intangible means? Worse yet, how much is the life of a person worth if that person was killed in a car wreck where someone else is responsible? Setting those amounts is tough, but setting the amounts of special damages is quite easy.

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