When it comes to personal injury cases, there is often a perception that outcomes are biased, or more favourable to specific groups of people. For example, men generally collect larger compensation amounts than women; the wealthy usually receive more than those with lower incomes; and some races appear to benefit more than others. While this may seem unfair, it is simply the result of a misunderstanding of how the legal system awards damages in these cases.
What goes into awarding damages?
Despite the appearance that compensation awards are handed out unfairly, there is actually a calculated system in place that isn’t based on one group being better than another, but rather what it takes to restore the injured party to its regular lifestyle. So, it’s less about unfair compensation, and more about the amount of money it takes to fully compensate the wronged individual. In other words, it takes more money to compensate an individual who is losing a salary of $1 million, than it does someone who only makes $20 thousand, for example.
However, it doesn’t have to do with just current income, but also what the potential earnings of the injured person might or could have been. One way to explain this is by looking at a university student. For example, the injured student is enrolled, and excelling in a highly specialized program, such as medical school. If post-injury, it is indicated that that individual would never be able to work in their field of study, then this potential career must be taken into consideration.
Taking potential earnings into account is of value, especially if the resulting injury was caused through an accident. This is also an important consideration, since a student is likely to turn little, if any, wages, making it unfair to penalize them financially because they just happened to be in school at the time. Furthermore, compensating someone in a more specialized program that leads to higher income potential makes more sense than to award the same amount to someone studying general arts, for example.
It is under this same ideology that wealthier individuals would be awarded higher compensation packages than those working a minimum wage job, or a woman receiving less than a man. It isn’t because the legal system favours one or the other, but instead uses statistics and other like-information to decide how each case is awarded.
Compensating a child
When a child is injured, the parents’ occupations are often used to determine how the case is compensated. This takes into account little regard for what the child might have become, and focuses, instead, on his or her parents’ job, in much the same way that the previous discussion indicated. This means that even if the child could have been a specialized medical doctor, but his or her parents were minimum wage earners, the latter would outweigh the former. This is because there is a belief that a child is more likely to fall in line with their parents’ occupation, rather than deviating into something different.
The same is also true if the parents were high earners, but the child actually saw little ambition and/or potential to do something similar. The child would still be compensated based on their parents’ careers, even if the child would never have held a similar paying job.