By Joey N. Friedman, CPA, ABV, MAcc, MIB — President, Joey Friedman CPA PA.
Quick Answer
Economic damages are calculable monetary losses with documented financial impact — lost wages, lost business income, lost profits, medical costs, property damage, lost earning capacity, business interruption. Non-economic damages are subjective harms not directly measured by money — pain and suffering, emotional distress, mental anguish, loss of consortium, loss of enjoyment of life, disfigurement. Economic damages are quantified by forensic accountants, economists, and other financial experts using documented evidence (financial statements, tax returns, medical bills, employment records). Non-economic damages are typically quantified by juries based on testimony from the plaintiff, family, and sometimes medical/psychological experts — there’s no single mathematical formula. Florida law (Florida Statutes §768.81 and others) treats the two categories differently for purposes of caps, comparative fault, and proof standards. For most business litigation (commercial damages, fraud, breach of contract), only economic damages apply. For personal injury cases, both economic and non-economic damages typically apply.
The Core Distinction
- Economic damages = money. Verifiable monetary losses with documented support.
- Non-economic damages = experience. Subjective harms that can’t be reduced to financial documentation.
Economic Damages — Categories
Lost wages / lost earnings
Past lost wages (between injury and trial) + future lost earnings capacity. Documented via employment records, tax returns, pay stubs, employer testimony.
Lost business income / lost profits
For commercial damages, business interruption, contract breach. See economic damages and lost profits. Calculated using before-and-after, yardstick, or sales projection methodology.
Medical expenses
Past medical costs + projected future medical costs.
Property damage
Repair cost, replacement cost, diminution in value.
Business value diminution
Reduction in business value due to wrongful conduct. Calculated using business valuation methods.
Out-of-pocket expenses
Costs incurred due to wrongful conduct — transportation, mitigation, professional services.
Lost earning capacity
Reduction in future earning ability due to injury or disability. Vocational analysis + economic projection.
Pre-judgment interest
Florida Statutes §687.01 sets pre-judgment interest rates.
Non-Economic Damages — Categories
Pain and suffering
Physical pain, ongoing discomfort, suffering from injuries.
Emotional distress / mental anguish
Psychological harm from the incident.
Loss of consortium
Loss of companionship, affection, support, intimacy in spousal relationship.
Loss of enjoyment of life (hedonic damages)
Reduced ability to engage in life activities.
Disfigurement
Permanent physical disfigurement from injury.
Loss of parental guidance
For minor children losing a parent, or parents losing a child.
Who Quantifies Each Type
| Damages type | Typical expert |
|---|---|
| Lost wages / earnings capacity | Forensic CPA / economist + vocational expert |
| Lost business income / lost profits | Forensic CPA |
| Medical expenses past + projected | Treating physicians + life-care planners |
| Property damage | Appraisers, estimators |
| Business value diminution | Business valuation expert (ABV-credentialed CPA) |
| Pain and suffering | Plaintiff + family testimony |
| Emotional distress | Mental health professional |
| Loss of consortium | Spouse / family testimony |
| Disfigurement | Plaintiff + photographs + medical records |
Florida Law Considerations
Florida medical malpractice caps. Florida Statute §766.118 historically capped non-economic damages in medical malpractice (current law should be verified case by case). Economic damages typically not capped.
Comparative fault. Florida Statute §768.81 governs comparative fault.
Joint and several liability. Florida has substantially modified joint and several liability under §768.81.
Wrongful death. Florida Wrongful Death Act (Chapter 768) governs damages categories.
Calculation Methods for Economic Damages
Lost wages (past)
Hourly rate × hours × time period + benefits + bonuses.
Future lost earning capacity
Pre-injury earning capacity − post-injury earning capacity, discounted to present value.
Lost business profits
Before-and-after method, yardstick method, or sales projection method. See economic damages and lost profits.
Medical expenses
Past: sum of incurred bills. Future: projected needs × cost × number of services, discounted to present value.
Business value diminution
Pre-damage business value − post-damage business value.
Common Calculation Errors
Not normalized. Pre-incident income inflated by extraordinary years.
Wrong discount rate. Future earnings need defensible discount rate.
Mitigation not addressed. Plaintiff has duty to mitigate damages.
Causation not established. Damages must flow from wrongful conduct.
Inadequate documentation. Plaintiff testimony alone often fails Daubert.
Inflation/productivity growth missing. Future earnings should reflect expected wage growth.
Wrong work-life expectancy. Statistical life tables apply.
The Forensic CPA’s Role
- Lost earnings / earning capacity
- Lost business income / lost profits
- Business value diminution
- Pre-judgment interest calculation
- Out-of-pocket cost documentation
- Damages model construction
See Daubert-ready CPA expert witness checklist. The forensic CPA does NOT quantify non-economic damages.
Frequently Asked Questions
What are economic damages?
Calculable monetary losses with documented financial impact — lost wages, business income, profits, medical costs, property damage, earning capacity.
What are non-economic damages?
Subjective harms not directly measured by money — pain and suffering, emotional distress, loss of consortium, disfigurement.
What’s the difference?
Economic = money (documented). Non-economic = experience (subjective). Both real. Difference in proof and quantification.
Are non-economic damages capped in Florida?
Florida historically capped non-economic damages in some contexts (med-mal §766.118). Caps have been challenged/modified. Verify case by case. Economic damages typically not capped.
Who quantifies economic damages?
Forensic accountants and economists. Lost earnings: forensic CPA + vocational expert. Lost business income: forensic CPA. Medical: physicians + life-care planners. Business diminution: ABV-credentialed CPA.
Are economic damages calculated to present value?
Past damages at face value + pre-judgment interest. Future damages discounted to present value using defensible discount rate.
Does Joey Friedman CPA PA quantify economic damages?
Yes. Core service line — lost earnings, lost business income, lost profits, business value diminution, business interruption.
Working with a Forensic CPA
Joey Friedman CPA PA provides economic damages quantification services throughout Florida.
About Joey Friedman CPA PA
954-282-9615 / Contact the Firm
Related coverage
- Economic Damages and Lost Profits
- Expert Witness and Litigation Support
- Daubert-Ready Checklist
- Business Valuation Methods
Florida Counties — Forensic Accounting and Business Valuation Hubs
Joey Friedman CPA PA serves clients throughout Florida. For county-specific forensic accounting and business valuation engagement details, see:
- Miami-Dade County Forensic Accounting (11th Judicial Circuit)
- Broward County Forensic Accounting (17th Judicial Circuit — Joey’s home county)
- Palm Beach County Forensic Accounting (15th Judicial Circuit)
- Orange County (Orlando) Forensic Accounting (9th Judicial Circuit + US Middle District Orlando Division)
- Hillsborough County (Tampa) Forensic Accounting (13th Judicial Circuit + US Middle District Tampa Division)
- Pinellas County (St. Petersburg / Clearwater) Forensic Accounting (6th Judicial Circuit + US Middle District Tampa Division)
Additional Florida Counties — Recently Added Hubs
- Duval County (Jacksonville) Forensic Accounting (4th Judicial Circuit + US Middle District Jacksonville Division)
- Lee County (Fort Myers) Forensic Accounting (20th Judicial Circuit + US Middle District Fort Myers Division)
- Collier County (Naples) Forensic Accounting (20th Judicial Circuit + US Middle District Fort Myers Division)