There are two categories of damages available to an injured party in a lawsuit involving personal injuries in New Jersey. These are known as liquidated and unliquidated damages. Liquidated damages are monetary damages that are able to be calculated. Liquidated damages include lost wages, unpaid medical bills, pharmacy expenses and any other out of pocket expenses that are incurred as a result of injuries sustained. As an example, if you are injured in a car accident, and you are out of work due to your accident-related injuries, your lost wages after taxes would be compensable. Likewise, medical expenses above and beyond your available medical insurance coverage would be classified as liquidated damages.

On the other hand, unliquidated damages are those damages resulting from pain and suffering, disability and impairment, and the loss of enjoyment of life. The amount of money awarded for these types of damages is left to the sole discretion of the jury. Under New Jersey law, an injured party does not sue for a stated amount of money damages. A jury decides the amount of money that the plaintiff should be awarded for pain and suffering, disability and impairment, and loss of enjoyment of life. However, there is an abundance of historical data from jury verdicts enabling plaintiffs and insurance companies to arrive at a fair and reasonable settlement given a particular injury so as to avoid a jury trial.

Both liquidated and unliquidated damages may also be applied prospectively. This means that if you sustained a permanent injury that will leave you some degree of lifelong disability and pain and suffering, you would be entitled to monetary compensation for the present value of these future damages. Likewise, if it is probable that you will incur future lost wages and/or medical expenses due to your accident-related injuries, you are entitled to monetary damages for the present value of those future expenses.

The damages awarded in personal injury cases in New Jersey, whether by way of settlement or a jury verdict, are free of Federal and State income tax. The tax laws recognize that when you are injured in an accident and you receive compensation for your accident-related injuries, that you are being brought back to your original position to the extent that money is able to make you whole. As such, the tax laws recognize that you as an injury victim do not profit from this monetary recovery.


Determining what fair compensation is for a given injury requires the expertise of an experienced and highly skilled New Jersey personal injury lawyer. Our firm prides itself on receiving just results on behalf of our clients. The insurance companies know that if a fair settlement is not reached that we are always prepared to take your case to trial. We have offices located in Parsippany and Newark, New Jersey. Contact our firm if you are seeking aggressive representation in your personal injury case.

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