Dateline: October, 2010, Issue 4
Do per diem or lump sum requests yield larger pain and suffering awards?
Jurors in personal injury cases must quantify a plaintiff's pain and suffering when awarding noneconomic damages. Plaintiff attorneys typically request that jurors award these damages either by suggesting a lump sum or by using a per diem calculation.
A lump sum request involves asking for one overall amount of money to compensate for the pain and suffering of a plaintiff, such as asking for $2 million.
A per diem request involves using a small unit of time (e.g., an hour, a day, a week, a month) and assigning it a monetary value (e.g., $240 per unit of time). This monetary value is then multiplied by the number of units (e.g., hours, days, weeks, months) in which injury is sustained to yield a figure to request for pain and suffering. A person who will suffer for 45 years (16,425 days) compensated at the per diem of $240 per day generates a request of $3,942,000 for pain and suffering.
McAuliff and Bornstein (2010) examined whether a per diem request or a lump sum request produces the largest jury awards for pain and suffering. All jurors were presented an automobile negligence case where an 18 year old pedestrian suffered compression fractures to her lumbar vertebrae, spent two nights in intensive care, and continued to experience back pain and restricted mobility for two years. Jurors heard one of four different requests to compensate for pain and suffering: a $175,200 lump sum request, a request of $7,200 per month for 2 years, a request for $240 per day for 2 years, or a request of $10 per hour for 2 years. Regardless of the exact request, the total amount requested of all jurors is the same (i.e., $175,200), and is three times larger than the $58,400 that jurors awarded for pain and suffering when no specific figure is suggested by the plaintiff's attorney.
The nature of the request for damages for pain and suffering matters. Awards for pain and suffering were the smallest for the $7,200 per month request, being roughly $66,000 (on average). Jurors' awards for pain and suffering were the largest for the $10 per hour and $175,200 lump sum requests, being roughly $150,000 (on average). The $240 per day request yielded noneconomic damages awards in the middle, being roughly $99,000 on average.
While a request for $10 per hour yields the highest damage awards on average, jurors also show the most variability in the damages they award in response to this $10 per hour request. Jurors agree most about the damages to award when the unit of time is larger (e.g., a month), and agree least when the unit of time is smaller (e.g., hour).
Source McAuliff, B.D., & Bornstein, B.H. (2010). All anchors are not created equal: The effects of per diem versus lump sum requests on pain and suffering awards. Law and Human Behavior, 34, 164-174.