Extra comments on the Personal Injury Damages calculator
Sunday, 05 August 2007 16:30

The Personal Injury Calculator can compute the size of a personal injury claim from data related to loss of income and extra expenses as a consequence of the injury. The calculator simply sums these income losses and extra expenses over a number of years given as input. Using this general principle many different components of injury claims can be modeled:

• Loss of earning capacity: after the injury the victim can not work the same number of hours any more, or has to take a less paying but physically/mentally less challenging job. Sometimes this effect changes over time. Such changes can be modeled by entering new situations with different income and expenses for 5, 10, 15 (etc) years after the injury.
• Aggravated damages: the suffering from pain or injury related inconveniences. This can be compensated with an extra yearly sum. The calculator can model this as extra yearly expenses. Sometimes a once-off sum can be claimed as well for the pain/inconvenience directly after the injury itself.
• Extra expenses due to limitations related to the injury. Disabled people are less mobile, so one can think of extra heating costs, or extra gardening, cleaning costs. On the other hand some costs could be lower after the injury, such as costs for traveling to work and clothing costs.
• Extra yearly health costs.
• Interest over the damage amount.
• Inflation: all amount in the situation are corrected for inflation.
• Yearly taxes: wealth tax and tax on interest.

The Personal Injury Calculator takes an inflation percentage as input parameter. The higher the inflation percentage is, the higher is the once-off damage amount. The question is which percentage is a reasonable figure.

In most developed countries the inflation is now between two and four percent, for instance two percent. But should we just take this standard percentage as input for the Personal Injury Calculator ? No, probably victims of personal injury suffer more from inflation than other people.

Their dependency on labor is higher than average and probably this is also true for their dependency on energy. They need other people for health care and to do cleaning, cooking, and house maintenance more than others do. Unfortunately both labor prices and energy prices tend to increase faster than the prices of for instance electronics and household equipment. The price of labor increases much faster than inflation simply because less and less children are born and also because there is little productivity increase in the type of labor the victims of personal injury need.

So it is probably fair to use a higher inflation percentage in the calculator, say five or six percent instead of three percent. Of course this is only the case if the damage is mostly "real damage", as opposed to aggravated damages.