Defuse the Discomfort Caused by Calculating Monetary Awards - dummies

Defuse the Discomfort Caused by Calculating Monetary Awards

When putting a price tag on something that’s priceless, such as a person’s health and wellbeing or the life of a loved one, start by acknowledging the impossibility of the task. Admit the inadequacy of monetary compensation to the bereaved parents. Acknowledge that the parents would give everything they have if their child could be returned to them.

Point out, however, that the justice system can’t perform miracles. It can’t undo the harm that’s been done. It can only try to deliver some form of justice, and the only remedy the law provides is the payment of money by the responsible party.

How to explain the monetary award

A monetary award has no objective equivalent in such situations, but you can make the award seem more acceptable to the recipient by explaining its value in terms of accountability and perhaps helping to prevent a similar loss to someone else in the future.

If a defendant is reluctant to pay damages because he sees it as an admission of guilt when he feels he has done no wrong, consider exploring with that party what it will mean to him if a jury finds him liable for wrongdoing. The jury verdict won’t change the facts as he knows them — that he’s innocent of wrongdoing.

The same is true with the settlement of the case. Settlement doesn’t mean he’s in the wrong; it simply means that a trial is not worth the time, stress, and expense to possibly suffer an unjust verdict.

How to price the priceless

Often, you may overcome a party’s reluctance to place a price on something that’s priceless by giving a reason, even if it’s not a very good reason, for your estimate. Lawyers who benchmark the value of a life have hundreds of thousands of metrics they use to support pretty much any number they choose. Here are just a few:

  • People suffering from impaired mental health such as mood and anxiety disorders earn at least 40 percent less every year than people in good mental health. Using that as an indicator and Mr. and Mrs. Toponah’s joint income of $100,000 per year before their son’s death, both stand to lose as much as $40,000 a year for the remainder of their working lives (35 years) for a total of $1.4 million.

  • Raising a child through college in the United States costs approximately $1.1 million for parents. This is the value Americans place on a single child and only for that child’s first 21 to 22 years. The Andersons have been deprived of their child for the remainder of their lives — the next 60 or 70 years. If you apply the $1.1 million value to the Anderson’s lifetime loss, the most minimal damage award a jury should bring back is at least $3.3 million.

  • Art appraisers would have no trouble telling you that had Mrs. Jones been carrying a Picasso instead of her priceless six-year old in her car, she would have been damaged in the sum of more than $100 million. Isn’t Jonah’s life worth as much as an old oil painting on cracked canvas?

  • The average American household has approximately $24,000 in discretionary income every year. The Andersons would gladly pay all of that income to have their child back for the remainder of their lives, which is approximately an additional 65 years or $1.65 million.

When one or both parties complain that the other is trying to monetize something that money can’t buy, help them move past impasse by talking about what money means and how it’s used. People save money for retirement, for instance, to live comfortably in old age. Children also help ensure comfort in old age.

The mother whose child has died because of someone else’s negligence will be more reliant in her old age on money than on family. The yearly cost of residing in an assisted living facility as opposed to living with family in one’s elderly years (which can be as many as 10 to 15 years) can run as high as $48,000 a year, or between $480,000 and $720,00 over the course of a person’s final years, and that’s just at life’s end.

Another way to assign a dollar value to the loss of something that’s priceless is to consider the payment by the negligent party as a way to establish a standard of care in the community. Rationales for this measure of damages include the following:

  • The sum the defendant would be required to spend to train its drivers better or make its cars safer or to test for contaminants in the food it packages.

  • The sum the defendant would have had to spend to put up railings on curves in mountain roads.