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What compensation are you entitled to after a bicycle crash?

California cyclists who are injured by negligent drivers are entitled to a wide array of compensation. Under tort law, the driver is responsible for a crash if they acted (1) negligently—by breaching a duty of care that reasonably prudent people are legally deemed to owe each other —or (2) intentionally and recklessly in causing injury to the victim. The purpose of tort law is to make the injured party whole again by compensating them for injuries sustained so as to put the person back in the same position they occupied before the tort occurred. In other words, the injured party is entitled to compensatory damages. Compensatory damages are usually separated into two separate categories: economic and non-economic.

I. Economic Damages

Injured cyclists, like all tort victims, are legally entitled to recover economic damages. Sometimes called “special” damages, economic damages refer to the financial harm suffered by an injured party, or those damages that can be accurately calculated in monetary terms. Bills, receipts, and business/wage records are common ways in which these out-of-pocket economic damages can be documented. Recoverable economic damages include the following:

  1. Medical expenses (past and future);
  2. Lost wages (past and future);
  3. Lost earning capacity;
  4. Loss of Ability to Provide Household Services;
  5. Loss or Destruction of Personal Property; and
  6. Costs of repair or replacement of property; and
  7. Expenses for things you can’t do as a result of the injury.

a. Medical Bills

All past medical costs relating to the subject injury (ambulance transportation, hospitalization, surgery, medication, etc.) will be awarded as damages. Additionally, you can also recover future medical costs, so long as they are reasonably necessary and related to the original injury. At trial, an expert witness will opine on what future medical treatment is necessary, as well as the costs.

Aggravation of Preexisting Condition or Disability

Sometimes an accident can reinjure a preexisting injury or condition. If you had a physical or emotional condition or disease that was made worse by the defendant’s wrongful conduct than you can be awarded damages that will reasonably and fairly compensate you for the effect on that condition.

b. Lost Wages

Tort victims forced to take time off work due to injuries sustained are entitled to recover the amount of these past loss earnings/wages/income/salary. Even if you are a salaried employee and are still paid during leave, you are still entitled to recover lost wages. You can also recover damages for future lost earnings (money you might have earned in the future were it not for the injury) so long as the amount of these earnings are reasonably certain to have resulted from the original injury.

c. Lost Earning Capacity

Long term or permanently injured individuals are entitled to compensation for the inability to work and earn money in the future. Losing the ability and freedom to start a business, seek employment opportunities, or even losing your current job are devastating and life-altering consequences. If the amount of money you would have been reasonably certain to earn had you not been injured can be calculated and proven, you can recover damages for lost earning capacity.

d. Loss of Ability to Provide Household Services

Everybody in a household contributes to the family by performing various chores and services. When an injury prevents someone from contributing some or all of their customary services, you and your family may be entitled to compensation for the reasonable value of those services. The justification is that someone else will have to perform those household duties because of the injury. Thus, you may also be awarded damages for the reasonable value of assistance-services provided by friends and/or family under this same theory.

e. Loss Or Destruction of Personal Property; Repair & Replacement Costs

Not surprisingly, if personal property—such as a bicycle—is damaged or destroyed during an accident, you can recover either the (1) repair costs or (2) fair market value of the property on the date of the accident, whichever is less. Additionally, you are permitted to recover damages for the loss of use of that personal property. For example, if cycling was your mode of transportation to commute to and from work, you are entitled to be reimbursed for the additional transportation costs you incurred if reasonable.

f. Missed Activities or Plans

People often plan and buy expensive activities in advance such as vacations, concert tickets, retreats, sporting events etc. If your injuries prevent you from going on a vacation, your vacation is spoiled and ruined. You are entitled to recover the costs of these pre-planned and purchased activities.

II. Non-Economic Damages

When an individual is seriously injured, the most devastating consequences are often not the injuries themselves or the medical bills, but the loss of pleasure humans derive from life and the consequential physical and mental anguish. The intangible losses naturally flowing from an injury are referred to as non-economic, or “general,” damages. Non-economic damages are intended to compensate you for the non-monetary aspects of the harm suffered. These damages are more abstract, not easily quantifiable, and subjective to the particular individual and their injury. Non-economic damages compensate for the following:

  1. Pain & Suffering;
  2. Loss of Enjoyment of Life;
  3. Emotional Distress; and
  4. Loss of Consortium;

a. Pain and Suffering & Loss of Enjoyment of Life

Pain & suffering and loss of enjoyment of life are two distinct legal concepts. Pain & suffering, both physical and mental, refers to the pain, discomfort, inconvenience, anguish, and emotional trauma that was caused by the injury itself. In contrast, loss of enjoyment of life (sometimes called “hedonic damages”), refers to the detrimental alterations of your life or lifestyle, or your inability to participate in the activities or pleasures of life that you formally enjoyed prior to the injury. For example, if an avid cyclist is rendered paraplegic as a result of a defendant’s negligence, loss of enjoyment of life includes the person’s inability to ever ride a bike again. Loss of enjoyment of life damages includes both the subjective knowledge that one can no longer enjoy all of life’s pursuits and the objective loss of the inability to participate in many of life’s activities.

b. Emotional Distress

While emotional distress generally may fall under the umbrella of “pain and suffering,” bystanders who witness a particularly traumatic accident can claim infliction of emotional distress. If the bystander is close to the “zone of danger” of the bicycle accident and witnessed the occurrence, they may have a claim for emotional distress. An emotional distress claim is stronger the more closely related the bystander is to the injured party.

c. Loss of Consortium

If you suffer a severely damaging injury, your spouse or registered domestic partner may have an independent cause of action for loss of consortium. Loss of consortium compensates a person for the loss of their partner’s companionship and services, including the loss of love, companionship, comfort, care, assistance, protection affection, moral support, enjoyment of sexual relations, and ability to have children. Loss of consortium claims permit monetary damages for present and any future loss that is sufficiently certain to occur.

III. Punitive Damages

While compensatory damages serve to make you whole, punitive damages function to punish the wrongdoer for their intentional, harmful conduct and to prevent said conduct from happening in the future. Similar to doctrines underlying criminal law, punitive damages serve to both punish and deter reprehensible acts in order to better protect society at large.

Punitive damages are appropriate when the defendant has acted in a particularly heinous manner and are unlikely to be included in a settlement unless a lawsuit is filed. Under California tort law, the injured party must prove by clear and convincing evidence that the defendant engaged in despicable conduct with malice. Despicable conduct is conduct that is vile, base or contemptible that reasonable people would look down on. Malice implies that the defendant acted with intent to cause injury and that person’s conduct was done with willful and knowing disregard of the rights or safety of another. A person acts with “knowing disregard” when he or she is aware of the probable dangerous consequences of his or her conduct and deliberately fails to avoid those consequences.

Some examples of bicycle-related cases where punitive damages were awarded include accidents caused by a driver intentionally running down a cyclist, a drunk driving defendants, and hit-and-runs. Drivers distracted by their cell phone that led them to cause an accident may also qualify for punitive damages.

Subrogation Liens

A subrogation lien is a claim that insurance companies may impose on a portion of your settlement/judgment. Insurance companies often file a lien against the amount of any settlement/judgment recovered by the injured party and, as such, a valid subrogation lien can be enforced against your settlement funds.

Thus, your health insurance contract likely obligates you to reimburse them for payments made on your behalf due to injuries suffered in the incident. As a firm, we always strive to negotiate these liens down to the greatest extent possible to increase your take-home settlement. To help us, it is important that our office be involved in communicating with your health insurance provider and/or medical providers at the outset of your case so we can account for subrogation liens.

Your Settlement or Verdict is Tax Free!

Generally, the damages received from most personal injury claims are not taxable under either federal or California law. This rule applies whether your case settled prior to trial or if we win a favorable jury verdict at trial. Neither the IRS (the federal government) nor the Franchise Tax Board (California) can tax you on the settlement or verdict amounts. This protection is enshrined into the Section 104 of the Internal Revenue Code, which excludes monetary awards received as a result of personal physical injuries or physical sickness from a taxpayer’s gross income. (26 U.S. Code § 104).

There are few exceptions to this general rule. Punitive Damages are always taxable. As such, if your lawsuit involves a punitive damages claim, we will always ask the judge or jury to separate its verdict into compensatory damages and punitive damages in order to avoid having your whole settlement taxed. Additionally, Section 104 of the Tax Code specifically only applies to “physical” injuries that you can see. Thus, claims for emotional injury only, such as infliction of emotional distress, would be tax-free unless we can prove the slightest amount of physical injury. But, if you have a legitimate physical injury (and victims of bicycle accidents are essentially guaranteed to suffer a physical injury), emotional distress damages arising out of that injury are also excludable.