What Is Per Diem Method for Calculating Pain and Suffering Damages?
The per diem method is a widely used approach for calculating pain and suffering damages in personal injury cases. The term "per diem" translates to "per day," and this method assigns a monetary value to each day the injured party has experienced pain, discomfort, and distress due to their injury. The goal is to provide a fair and quantifiable way to compensate for non-economic damages. Let's delve deeper into how this method works and its implications.
Detailed Explanation of the Per Diem Method
1. Determining the Daily Rate
The first step in using the per diem method is to establish a daily rate that represents the monetary value of the injured party's pain and suffering. There are several ways to determine this daily rate:
Daily Wage: One approach is to base the daily rate on the injured party's daily wage or salary. The rationale is that the value of a day of pain and suffering should at least equal the person's typical daily earnings.
Living Expenses: Another method is to use an average daily rate for living expenses, reflecting the amount of money needed to cover the injured party's basic daily needs.
Arbitrary Amount: In some cases, an arbitrary amount is assigned based on the severity of the injury and the impact on the individual's life. This amount is often determined through negotiation or by the court.
2. Calculating the Duration of Suffering
The next step is to calculate the total duration of the injured party's pain and suffering. This includes:
Medical Treatment Period: The time during which the injured party undergoes medical treatment and recovery.
Rehabilitation Period: The period during which the injured party undergoes rehabilitation or physical therapy to regain functionality.
Ongoing Discomfort: Any ongoing pain, discomfort, or limitations resulting from the injury that persist after initial recovery.
This period is typically expressed in days, weeks, months, or years, depending on the specific circumstances of the case.
3. Multiplying the Daily Rate by the Duration
Once the daily rate and the duration of suffering are determined, the final step is to multiply these two figures to arrive at the total amount for pain and suffering damages.
Advantages of the Per Diem Method
The per diem method offers several advantages in calculating pain and suffering damages:
1. Objective Calculation
The per diem method provides a more objective way to quantify pain and suffering by assigning a specific monetary value to each day of suffering. This reduces the subjectivity involved in determining the amount and helps both parties reach an agreement more easily.
2. Consistency
By using a clear and consistent formula, the per diem method ensures that the compensation for pain and suffering is predictable and fair. This consistency helps avoid significant disparities in awards for similar cases.
3. Fair Compensation
Basing the daily rate on the injured party's daily wage or living expenses helps ensure that the compensation is fair and reflective of the individual's specific circumstances. This approach recognizes the daily impact of the injury on the person's life.
Considerations and Challenges
While the per diem method has several advantages, there are also some considerations and challenges:
1. Determining the Daily Rate
Determining an appropriate daily rate can be subjective and vary significantly depending on the injured party's occupation, lifestyle, and the severity of the injury. This can lead to disputes between the parties involved.
2. Variability in Pain and Suffering
Pain and suffering are inherently subjective experiences, and the impact of an injury can vary widely from person to person. This variability can make it challenging to standardize the daily rate and duration of suffering.
3. Legal and Negotiation Factors
The per diem method is one approach to calculating pain and suffering damages, but the final compensation may also be influenced by negotiations, legal arguments, and other factors in the case. Courts and insurance companies may use different methods or adjust the calculations based on the specifics of the case.
Conclusion
The per diem method is a widely used approach for calculating pain and suffering damages in personal injury cases. By assigning a daily monetary value to the injured party's pain and suffering and multiplying it by the duration of suffering, this method provides a structured and objective way to quantify non-economic damages. While there are challenges and considerations in determining the daily rate and duration, the per diem method offers consistency and fairness in compensating injured parties for their pain and suffering.