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Hedonic Damages in Nevada

In Banks v. Sunrise Hospital, 120 Nev. 822, 102 P.3d 52 (2004) Nevada joined those states which allow an award for hedonic damages stating:

damages for “loss of enjoyment of life” compensate for the limitations, resulting from the defendant’s negligence on the injured person’s ability to participate in and derive pleasure from the normal activities of daily life, or for the individual’s inability to pursue his talents, recreational interests, hobbies, or avocations.

In Nevada, hedonic damages are treated as another element of pain and suffering but with a twist. Normally testimony about pain and suffering is based on the Plaintiff’s subjective experience. However, where hedonic damages are involved, Nevada has allowed experts to calculate the value of the hedonic loss.

To prove a claim for hedonic damages, Plaintiff’s attorneys usually rely on economists to attempt to set a value for the loss of the enjoyment of life. The most commonly used method for calculating hedonic damages is called” willingness to pay” which has two components; “survey” and “wage risk”. The Survey assumes a town with a population of 20,000 people faced with a toxin that will cause three deaths. The townspeople are asked how much money they would be willing to spend to reduce the probability of death from 3 in 20,000 to 1 in 20,000. This is combined with a “wage risk” analysis which examines the salaries people receive for doing high-risk jobs (policemen, firemen) and the amount of salary they would give up for a lower-risk job. Using these calculations, the economist determines a “range of damages” representing the tangible value of a life.

Many economists are critical of “willingness to pay” because it does not consider the injured plaintiff’s specific characteristics or lifestyle and except for personal injury lawsuits is generally applied only to large groups.

While Nevada has generally approved of the use of hedonic damages, there are still many questions that need to be answered. For example, many jurisdictions exclude hedonic damage claims in wrongful death cases. Whether the Nevada Supreme Court will allow hedonic damages in wrongful death cases is still unknown. Furthermore, for the most part, hedonics damages have been sought in catastrophic injury cases. To what extent the Nevada Supreme Court will allow hedonic damages in more common personal injury settings will need to be watched.


About Michael Mills

Mr. Mills practices in the area of civil litigation and appeals, with particular experience in matters involving trucking liability, insurance defense, insurance coverage, premises liability, products liability and defense of personal injury. Mr. Mills is a member of the Trucking Insurance Defense Association, the Defense Research Institute Trucking Committee and the Nevada Motor Transport Association. Mr. Mills is licensed to practice before the Nevada Supreme Court and the Utah Supreme Court. He is also licensed to appear before the United States Supreme Court, the U.S. District Courts for the Districts of Nevada and Utah, as well as the U.S. Court of Appeals for the Ninth Circuit. Mr. Mills has created 3 Blogs for the benefit of the insurance industry. He serves as editor and publisher of the Nevada Insurance Law Blog, the Nevada Coverage and Bad Faith Blog and the Nevada Trucking Law Blog.

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