Personal Injury Law

Wrongful Death Compensation: How Much?

I stumbled on an interesting Chicago Law Review article today by Eric Posner (Judge Richard Posner's son) and Cass Sunstein (now with the Obama administration). I like Sunstein's views on a number of issues, including animal rights.

The subject article is how the legal system assigns money damages to the loss of human life in wrongful death cases with an eye towards creating greater uniformity. The authors approach this question like it was a mathematical equation to be solved. For grief, the authors conclude that $500,000 is a good starting place, suggesting this formula as the paradigm to determine compensation in wrongful death cases:

To derive a willingness to pay (WTP) to avoid grief from a spouse's death, one would need to (1) determine the average length of time that the grief persists (for example, until remarriage); (2) find an equivalent happiness difference in an area of life that has been reliably monetized (for example, willingness to pay to avoid disease or depression); (3) convert this difference into annual units; and (4) multiply (1) by (3).

I understand the goal of uniformity and I even understand the formula. The problem is homogenizing the equation for everyone. Values vary because juries vary but also because facts vary wildly from case to case. Moreover, the formula is artificially low because it uses how much you will spend to avoid a loss to determine how you value the loss. For example, if you are willing to pay $5 to avoid a 1/100,000 risk of death to your spouse, than the loss of your spouse is worth $500,000.

Full post as published by Maryland Injury Lawyer Blog on April 27, 2010 (boomark / email).