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How Can Out-of-Pocket Expenses be Paid for in Medical Negligence?

Forecasting out-of-pocket expenses after medical negligence. 

As the name suggests, this head of damage covers all immediate expenses, past and into the future. These ‘immediate expenses’ generally refer to things such as:

  • Medical treatment;
  • Medication;
  • Equipment and housing alterations;
  • Paid care; and
  • Travel expenses associated with the above.

Classified as ‘special damages,’ - or, damages possible of precise calculation – out-of-pocket expenses are fairly easy to calculate, particularly in reference to those that have happened in the past.

'Special damages' simply refers to damages that are possible of precise calculation. 


This is opposed to 'general damages', which refers to subjective items like pain, suffering, and loss of amenities. 

Since we use the past expenses to calculate the future expenses, we will be doing this slightly different from the previous heads of damage, calculating the past first.

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Quantifying Your Past Out-of-Pocket Expenses

To quantify your past expenses, you simply need to list the main out-of-pocket costs you have incurred as a result of the medical negligence.

This is generally in the form of:

  1. 1
    Medical appointments;
  2. 2
    Medication;
  3. 3
    Additional equipment; and
  4. 4
    Travel.

It’s important to remember (when listing medical costs) to factor in previous payments owed to third-parties, such as Centrelink and Medicare. This needs to be done as the amount will be required to be repaid from the settlement amount.

To calculate your costs:

STEP 1: LIST YOUR COSTS

STEP 2: total the costs

The total will be your past out-of-pocket expenses, but there is one more thing to consider on this amount – the interest!

Interest on past expenses

We can’t forget that there was a potential to earn interest on the past expenses. The law in
QLD takes this into account, allowing you to be compensated for it. To work out what amount
you should be compensated for, follow these steps:

STEP 1: RBA INTEREST RATE

STEP 2: HALF IT

STEP 3: FINAL CALCULATION

EXAMPLE: TOM

For Tom, the current Reserve Bank of Australia interest rate is 0.75. We can put that into the following calculation to work out his interest on past expenses:

0.75% ÷ 2
x
$1709.05
=

$6.71

You can now add this number to your schedule on page XX.

Now that we’re finished with the past, we can move onto the final section – your future expenses.

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Quantifying Your Future Out-of-Pocket Expenses

Once again, predicting the future is difficult – but here’s where we heavily rely on the experts to help us out.

Nearly all of your out-of-pocket expenses will be related to medical necessities – whether that’s appointments and medication, travel to and from, or recommended modifications from an occupational therapist.

The good news from this is that you can rely on a medical professional to identify what future costs you could incur and for how long. They will generally tell you the cost of these items, and you can note them down.

For contentious and varying items such as pain killers, where an amount can’t possibly be
prescribed for ten years down the track, a ‘global buffer’ can be applied. This is an estimated
amount for any unforeseen costs you might experience.

This is the first option but, for a more precise calculation, we’ll be basing your projected requirements off your current requirements (once your injury has stabilised).

We wait for injuries to stabilise so that we have an understanding of what the longterm might look like.

To calculate your future costs using this method:

STEP 1: OUT-OF-POCKET EXPENSES

STEP 2: the years you'll be paying it for

STEP 3: 5% multiplier

STEP 4: THE FINAL CALCULATION

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Putting it all together.

You should now have added your figures to your schedule of damages.

It’s recommended, at this point, to add up your damages so far to see if you’ve reached the
$150,000 quantum threshold.

Below is Tom’s example.

By doing this, you can check if you can surpass the remainder of this workbook and start working out how you’re going to hold your doctor accountable.

If you haven’t passed the $150,000, don’t dispair. You might be in a position where liability is clear cut (or admitted) and you won’t need the expert reports in your situation.

You can fill in this interactive form and will get reviewed by an experienced medical negligence lawyer who will provide you with a step-by-step guide of what to do next.

Want a free review of your schedule of damages?


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What is Pain and Suffering and How Can I Calculate It?

Monetising the pain and suffering you've experienced.

In this section, we’re going to focus on the actual victim of medical negligence, and how the injuries have impacted their life.

We call these ‘general damages’.

General damages merely refer to non-pecuniary, or non-monetary, damages.

In simpler terms, it refers to the impacts of medical negligence that cannot immediately be measured in monetary value. These impacts include:

  • Pain;
  • Suffering;
  • Loss of enjoyment of life or a reduction in quality of life (loss of amenities); and
  • Emotional harm. 

To help quantify something so subjective, the courts created a generalised approached called the ‘Injury Scale Values’ (ISV). 

An ISV is a generalised approach to measuring the pain and suffering each type of injury causes.

The scale goes from 0 to 100 and, generally, the higher the ISV number, the greater the injury,
the bigger the compensation.


For example, the impact of paraplegia on your quality of life will be much greater than a stubbed toe – the ISV considers this and produces a general figure for each – $283,800 and $3,160 respectively.

So, now, let’s dig deeper and explore what ‘pain and suffering’ means in legal terms, and convert it to a dollar figure.

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Quantifying Your Pain and Suffering

Despite its subjectivity, pain and suffering is quite easy to calculate because of these ISV’s.

What you need to do is not be intimidated by the number of steps – each is a bite-sized step of a larger, simpler process.

To find out the value (ISV) of your injury and what it’s worth, follow these steps:

STEP 1: LIST YOUR INJURIES

STEP 2: locate them in the isv

STEP 2A: use the contents

STEP 2b: identify the severity

STEP 2C: scale value

This is the final step for physical ISV’s at the moment. We’ll return to it after we’ve
considered the ISV’s for any mental trauma you might’ve experienced. If you are sure
you have no mental trauma to report (or the impact is minor), you can move onto translating your ISV to a dollar figure.


Consideration for mental trauma.

There are a few extra steps involved when recording your mental injuries.

In the CLR, instead of noting what the injury is, such as ‘schizophrenia’, ‘PTSD’, ‘anxiety’, etc., it
instead refers to a ‘PIRS’ rating. This stands for the ‘psychiatric impairment rating scale’.

This is used because the measurement is taken by the level of impairment caused, rather than the ‘injury’ itself.

The Psychiatric Impairment Rating Scale (PIRS) is a similar tool to the ISV, however is used to measure the impact that mental trauma and psychiatric impairment has had on a person.

For example, it will consider in what ways PTSD has affected you, rather than what the level of
PTSD you have is.

Straightforward, we need to work out your PIRS and then convert it to an ISV. This will then be converted to a dollar figure.

STEP 1: THE PIRS

STEP 2: IDENTIFY THE IMPACTS

STEP 3: IDENTIFY THE SEVERITY

STEP 4: NOTE THE SCALE

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You have now measured your level of mental impairment and can translate that to an ISV number. To do this:

STEP 5: RETURN TO THE ISV

STEP 6: TRANSLATE TO ISV

STEP 7: SCALE VALUE

STEP 8: CONSOLIDATION


The conversion from ISV to $

We’ve worked out some numbers... but what do they mean and how do we translate them to a dollar figure?

STEP 1: dominant isv

Variation: unsatisfactory isv

STEP 2: translate to monetary figure

STEP 2A: DATE RANGE

STEP 2b: isv range

STEP 2c: base and variable amounts

STEP 2d: calculate the variable amount

STEP 2E: THE FINAL CALCULATION

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Putting it all together.

You should now have added your figures to your schedule of damages.

It’s recommended, at this point, to add up your damages so far to see if you’ve reached the
$150,000 quantum threshold.

Below is Karen’s example.

By doing this, you can check if you can surpass the remainder of this workbook and start working out how you’re going to hold your doctor accountable.

If you haven’t passed the threshold yet, don’t worry.

We’re about to take on our third most significant head of damage (from a quantum perspective) – monetising your future pain and suffering.

Next article: What are out-of-pocket expenses after medical negligence, and how are they calculated?


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What is Gratuitous Care and How Can I Calculate It?

Monetising the care your family provides. 

Now that we’ve calculated the biggest head of damage, we can move onto the second biggest – care.

And don’t worry, this one’s easier.

Victims of medical negligence will often find themselves relying on relatives, partners, and other persons for care and assistance.

As opposed to commercially paid or hired help, this type of care is referred to as ‘gratuitous’ – or, free of charge.

Gratuitous care simply refers to the services provided by family members to assist in the day-to-day care of a medical negligence victim.

But, the addition of this care can often have a heavy impact on the providers, taking time out of their social lives, work, and other day-to-day duties.

To compensate for this, the court offers an award for gratuitous care services.

This award is calculated with reference to the market (or commercial) cost of the services, with the extent of coverage stretching far and wide across common duties such as:

Day-to-day duties;
  • Mowing;
  • Dishes;
  • Mopping and vacuuming;
  • Changing sheets;
  • Washing and cleaning;
  • Groceries;
  • Transport;
  • Other domestic chores.
Personal duties;
  • Ability to maintain personal hygiene;
  • Going to the bathroom;
  • Taking medication;
  • Errands such as banking;
  • And other personal duties.
Home and maintenance duties; 
  • Clearing gutters;
  • Washing external and internal walls;
  • Home repairs;
  • General maintenance – light bulbs, fixing gates, etc.

Before we jump in, we wanted to cover off some important limitations, or criteria, that apply to gratuitous care payouts.

EXAMPLE: JESS

Jess experienced birth trauma as a result of her midwife’s negligence. Brett, her husband, now has to take care of day-to-day domestic duties - finishing work early to make sure dinner is cooked, taking time out of his day to provide the necessary care for their newborn baby where Jess normally would.

On top of this, he’s driving her to and from her appointments, helping her buy medication, and running her errands for her.

In this situation, the court would provide an award for gratuitous care to pay for Brett’s time. The amount is based on the commercial price for these services – in other words, what would be the cost of hiring someone commercially to do this?

We’ll continue this in the next section, but what we first need to consider is whether or not Brett is actually eligible to claim for these services. Let’s cover off some of the limitations first.

LIMITATION 1: REQUIREMENTS

LIMITATION 2: ELIGIBLE PROVIDERS

LIMITATION 3: FINANCIAL AWARD CAP

Now that you’ve checked your eligibility for gratuitous care, let’s
jump into calculating it.

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Quantifying your Future Gratuitous Care

Quantifying the future costs can often come with greater room for disagreement because, once again, you’re predicting the future.

Despite this, we’re going to do it before past care because it can often have a larger outcome - and we’re keeping that $150,000 in mind.

To predict the future as accurately as possible, you’ll need to have evidence from a range of
medical professionals. They with their recommended care services and their expectations for
how long you’ll require these services.

We recommend you get one (or multiple) of these assessments before starting this section. If
that’s not possible, then not to worry! Do your best to predict.

EXAMPLE: SASHA

Jess’ obstetrician might recommend 12 weeks of bed rest, six months of part-time postnatal care for the baby, three more ultrasounds in different towns, and 6 GP visits.

From this, an occupational therapist would be able to decipher what tasks Jess will and won’t be able to do, how often they will need to be done, and for what time frame.

This might be 5 hours per week for cleaning and outdoor maintenance until the end of Jess’ life.

Future Economic Loss

To start your calculation, you will need to:

STEP 1: REQUIRED TASKS

STEP 2: FOR HOW LONG

STEP 3: commercial cost

STEP 4: 5% MULTIPLIER

STEP 5: THE FINAL CALCULATION

You should note this number on your own Schedule of Damages table to keep track of where you’re at. 

Now that we’ve covered your future care costs, lets take a look at your past care.

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Quantifying your Past Gratuitous Care

Now that we’ve quantified your future care costs – the significant costs – we can start quantifying the care you’ve already received.

And doing that isn’t too hard.

step 1: care received

step 2: COMMERCIAL costs


Putting it all together.

Now you can add this to your schedule of damages.

It’s recommended, at this point, to add up your damages so far to see if you’ve reached the $150,000 quantum threshold.

Below is Jess's example:

By doing this, you can check if you can surpass the remainder of this workbook and start working out how you’re going to hold your doctor accountable.

If you haven’t passed the threshold yet, don’t worry.

We’re about to take on our third most significant head of damage (from a quantum perspective) – monetising your future pain and suffering.

Next article: What is pain and suffering and how is it calculated?


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What is Economic Loss and How Can I Calculate It?

Quantifying your contribution to the workforce. 

It’s not uncommon that a victim of medical negligence will experience difficulties in trying to return to work in any capacity, let alone the same job.

The strain of an injury, or the mental trauma inflicted, can often cause the victim to lose wages, now, and into the future.

The past and future economic loss head of damage aims to protect the victim from a loss of earnings. It bridges the gap between what they used to earn, what they earn now, and what they will earn 20 years into the future.

Simply put, future economic loss covers a person's reduced income or lost opportunities.

More specifically, it can cover things like:

  • An inability to return to work;
  • An inability to continue a previous, higher-paying career;
  • Fewer hours at work;
  • Change in duties or job; and
  • An inability to progress higher with promotions or job changes.

These are the types of things not accounted for in most government and private insurance
schemes.

Schemes like the NDIS or Private Accident Insurance.

These schemes will pay the immediate out-of- pocket expenses, but not pay for loss of earnings.

The law will, as much as reasonably possible, try to put the injured person back into the position they most likely would’ve been in before the accident, which includes considering their future potential.

And just how you calculate these future losses can be a complicated exercise.

See, if you asked yourself 10, 15, 25 years ago where you’d be today, you’d probably have no idea.

But that’s precisely what this head of damage is asking you to do – predict every wage-earning movement from the date of the incident until the expected time of retirement.

It might seem impossible. But in just 15 minutes you will be able to do it.

Below we’re going to step you through the same process a lawyer would take to help you calculate your economic loss - considering your future first, and then the past.

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Quantifying your Future Economic Loss

For the majority of claimants, future economic loss will be the most significant head of damage they receive. So whilst this section might seem confusing or complicated, it’s not that difficult if you follow a template.

All heads of damage after this will be an easier step towards the quantum threshold of $150,000.

Future Economic Loss

EXAMPLE: SASHA

Sasha was a mother of one who experienced surgical negligence.

After Sasha became a victim of surgical negligence, she found it impossible to maintain her hours at work. She had to halve her hours – from 40 to 20 – which, naturally, halved her income from $850 to $425. 

Her doctor told her she would never be able to return to the 40 hours per week in her current job. Below, we will use this example to step you through the first section.

STEP 1: REDUCTION IN INCOME

STEP 2: years until retirement

STEP 3: 5% Multiplier

STEP 4: future loss of earnings

STEP 5: GLOBAL BUFFER

STEP 6: THE FINAL CALCULATION

You should note this number on your own Schedule of Damages table to keep track of where you’re at. 

A schedule of damages is the document a lawyer gives to insurers that summarises the losses their client has experienced.

Future Loss of Superannuation

We’ve covered your losses up until retirement, but what about losses after retirement?

Expenses don’t just stop once you retire - if anything, they can get worse.

That’s why (in compensation), superannuation is accounted for, and quite easy to work out. To calculate future losses, we need to look at the future superannuation rate.

As of 2019, the rate of superannuation that an employer has to pay is 9.5% of your wages.

By 2025, this rate will increase to 12%.

For this reason, we will work off the 12% for calculating your future loss of superannuation.

STEP 1: FUTURE LOSS OF SUPERANNUATION

Now that you have that, you can add it to your schedule of damages.

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Quantifying your Past Economic Loss

Now that we’ve covered what you are predicted to lose in the future, let’s look at what you’ve already lost since the accident.

We call this period, between the accident and now, the ‘past’.

‘Past’ refers to the period between the medical negligence occurring and the current date.

For this reason, calculating your past economic losses will be much easier than the previous
section - predicting the future losses.

STEP 1: MISSED HOURS AT WORK

STEP 2: LOST INCOME

STEP 3: ADDITIONS FOR LOST BENEFITS

EXAMPLE: SASHA

In Sasha’s example, we know that she has been losing $450 a week (half of her income). Let’s say that’s been going on for 12 months now (52 weeks), and that every month she would earn a $100 bonus for meeting her targets.

We would determine her past economic loss by calculating:

$450 x 52
+
$100 x 12
=

$24,600

You can now add this number to your schedule of damages.

Interest on Past Economic Loss

We can’t forget that there was a potential to earn interest on the past economic loss.

The law in QLD takes this into account, allowing you to be compensated for it. To work out what amount you should be compensated for, follow these steps:

STEP 1: RBA INTEREST RATE

STEP 2: HALF IT

STEP 3: FINAL CALCULATION

EXAMPLE: SASHA

For Sasha, the current Reserve Bank of Australia interest rate is 0.75 and her past economic loss was $24,600. Therefor:

0.75% ÷ 2
x
$24,600
=

$95.25

You can now add this number to your schedule of damages.

Superannuation on Past Economic Loss

The final step in this head of damage is calculating your past loss of superannuation, much like we calculated your future loss.

To do this, we apply the same formula. However, we will use the current standard rate of 9.5% instead of the future 12%.

You should replace the 9.5% with the rate your employer has been paying if it’s higher than this base rate.

STEP 1: PAST LOSS OF SUPERANNUATION

You can now add this number to your schedule of damages.

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Putting it all together.

Now you can add this to your schedule of damages.

It’s recommended, at this point, to add up your damages so far to see if you’ve reached the
$150,000 quantum threshold.

Below is Sasha’s example.

economic loss

By doing this, you can check if you can surpass the remainder of this workbook and start working out how you’re going to hold your doctor accountable.

If you haven’t passed the threshold yet, don’t worry. There are three more heads of damage to cover.

Let’s jump into our second head of damage - gratuitous care.

Next article: What is gratuitous care and how is it calculated?


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damages

What Are Damages and How Can I Calculate Them?

There’s medical negligence. And then there’s medical negligence compensation.

So far, this series has been about medical negligence.

But now, it's going to focus on quantifying the financial impact of this negligence.

This financial impact is often referred to as “damages” or "compensation".

And, simply put, damages are the difference between the position of a person before​ the incident and the position of the person after the incident.

'Damages' assesses the difference in a person's life before and after the accident.


 To say a person has suffered damages is to invite a comparison between what would have been, and what now is.

In medical negligence, we divide the impacts into four main quantifiable areas called heads of damage’.

The main heads of damage we will discuss are:

  1. 1
    Past and future economic loss;
  2. 2
    Past and future gratuitous care;
  3. 3
    Pain and suffering;
  4. 4
    Past and future out-of-pocket expenses.

These heads of damage cover a vast array of costs (or loss of earnings) incurred by a victim of medical negligence. 

Things such as an inability to return to work, wages for the family members who care for you, monetizing your loss of enjoyment in life, immediate and future medical expenses - the list goes on.

These heads of damage are what makes up your total compensation amount from an insurer. 

And, since everyone's number 1 question after medical negligence is 'will a claim be worth it?', we've created a 5-part series and downloadable workbook for you to quantify all four heads of damage, all on your own. 

That way you can know what can be covered, and the extent to which it can be covered.

Or, in other words, you can know the potential compensation payout you'd receive for your medical negligence

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Knowing your potential compensation is critical for determining how to approach holding your doctor accountable. That's because there're two ways you can hold a doctor accountable, and it hinges on how much your claim is worth

But why does it depend on that? And why does it differ to other negligence claims like car accidents? Why do I have to have such high damages when I didn't do anything wrong? After all, the doctor was negligent regardless of my payout - right?

Well, technically, that's right. 

But there's one unique aspect of medical negligence claims that make your damages calculation vital...

It's time to call in the professionals.

You might’ve identified a breach of duty of care after our first article.

But whilst you might think your doctor has breached, the judge needs more than just your word or the word of a lawyer to believe the practitioner was at fault.

And that's because medical treatment is not a lay person's or lawyer's area of expertise. 

Most of the public have limited medical knowledge. They don’t know if a medical procedure is right or wrong.

What you need as a claimant is another medical practitioner to agree with you, saying that the treating doctor (or system) got it wrong.

And that's where things can get expensive.

That's because the majority of doctors don’t want to criticise the performance of their peers. Not in public. And certainly not in the courtroom.

The band of brothers (and sisters) closes very tightly around itself when one of their own stand accused of sub-standard, careless, or reckless treatment.

To find such a doctor willing to testify against his colleague can be like finding a needle in a haystack.

As a result, it is common practice to ask medical professionals from interstate and overseas to testify.

The willingness of these ‘out-of-state’ professionals to testify is sweetened by them being paid a fee to write a report.

And these reports cost anywhere from between $3,000 to $20,000.

And it doesn’t end there.

In a lot of medical negligence cases, there will be several doctors, nurses, and medical staff “in the gun.” This can require several reports from several sources.

For example, Doug, a carpenter, has an operation to fix a broken bone. It isn’t set correctly, and the wound becomes infected. Eventually, he has his leg amputated.

amputee

And as the requirement for these reports continues to pile up, it becomes apparent that the financial losses suffered by the negligence need to be significant enough to outweigh the costs of these reports.

At the very least, we need to get a report from an orthopedic surgeon to suggest the first operation had gone wrong. Then perhaps a report from a general surgeon about the actual operation. Maybe a report from how the infected wound should have been treated. And so on.

4 reports at $5,000-$10,000 each.

Doug will now be $20,000-$50,000 out-of-pocket if he wants to prove his doctor breached a duty of care.

You will then need independent opinions from other specialists to suggest Doug can never return to work.

That might include an occupational therapist (OT). This might include a psych assessment.

Another $10,000.

As a result, you need about 150,000 reasons before a lawyer will take on a medical negligence claim.

In other words, around $150,000 in damages (financial losses) to justify spending $50,000 on expert opinion reports.

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Naturally, $150,000 sounds like a lot of money.

But due to the impact that medical mistakes can have on a patient’s life, this level of damages is more common than not.

This $150,000 is what we, as compensation lawyers, call the ‘quantum threshold’.

‘Quantum’ simply means the monetary amount payable for a loss.


Naturally, quantum threshold then refers to the minimum amount payable for a loss required by a no-win no-fee lawyer to take on the case.

The quantum threshold will vary from firm to firm and very much depends on how ‘easy’ the breach can be proved. If the treating doctor admits he made a mistake (accepts liability), then that figure of $150,000 can be drastically reduced.

To help you work out if you reach the quantum threshold, and to see what amount of compensation you could be entitled to, we’ve created a step-by-step process for calculating your losses.

Your goal is to see if you have a viable medical negligence claim – one that will allow you to sue the doctor or hospital with confidence.

And that viability is determined by hitting the $150,000 threshold.

Once you hit that $150,000, you can move onto the next section on holding your doctor accountable (coming soon), which will be an article on starting a claim – what to do, and what not to do.

The journey to $150,000 might be shorter than you think.

When you start breaking down the impacts of medical negligence and quantifying the outcomes, you’d be surprised to find how easy it is to reach the quantum threshold of $150,000.

From every-day tasks to rehabilitation costs to lost employment opportunities, every aspect of your life after the negligence is considered. You can even quantify something as simple as the inability to put on a shirt.

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By using this bite-sized approach (and considering everything), we can determine a claim’s viability quickly and easily.

It’s these bite-sized chunks of change that make up a much larger picture, falling under the four blanket ‘heads of damage’ listed above.

For the purpose of getting you to the $150,000 quicker, we’re going to focus on these heads of damage in order of their general worth, from largest to smallest.

We'll be working through the stages in the following order:

Heads of Damage

And in each of these sections will be a step-by-step guide to calculating your own losses, allowing you to keep track of where your dollar figure is up to.

To get the most out of this article, we recommend you download the ‘Damages Calculator Workbook’.

One download between you and your key to compensation...

  • Printable or accessible as an interactive PDF;
  • Complete with examples, hints and tips, and space to do your working
  • 1 download for our entire 5-part online series

Want to fast track the process with our free interactive workbook?

This is based on the actual schedule of damages that real lawyers use to negotiate compensation every day.

All you need to do is pull up a calculator, follow along, and keep a running tally on your Schedule of Damages until you reach that $150,000.


One last thing before we get started.

Throughout this series of articles, we’re going to refer to ‘Vincent’s Litigation Tables’ quite a bit.

Firstly, don’t be intimidated by the name.

‘Vincent’s’ is an Australian accounting firm that prepares these tables for lawyers. The lawyers then use these tables to calculate future projections.

Since the dollar in 1980 is not worth what it is today, and the dollar today is not what it will be worth in 2040, Vincent’s created these tables to account for that.

Some of the tables also outline the average life expectancy for lawyers to base calculations off, tax rates, weekly average earnings, etc. But don’t worry, most of these won’t be used.

Whenever we do use a table, we will break it down for you bit-by-bit, telling you exactly what you need to use and when.

All you need to do is follow the examples.

Next article: What is economic loss and how is it calculated?


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