Calculating Damages in a Defamation Case

Figure out how much your defamation (libel or slander) case might be worth.

Defamation can occure when someone makes a false statement about you, and your reputation suffers harm as a result. In this article, we’ll discuss how to calculate your damages in a defamation case—in other words, how to figure out how much your case might be worth. (Get the basics on lawsuits over defamation of character.)

Types Of Damages

In legalese, "damages" is another word for the harmed person's losses resulting from the at-fault party's actions. Generally, there are three types of damages in a defamation case: (1) actual damages, (2) assumed damages, and (3) punitive damages. Let's take a closer look at all three.

Actual Damages. Actual damages are compensatory damages, which in a defamation case are usually somewhat quantifiable and are meant to restore the injured party, as nearly as possible, to the position he or she would have been in had the wrongful conduct (the harmful statement in a defamation case) never occurred.

Actual damages include all financial losses the plaintiff has suffered with respect to his or her property, business, trade, profession or occupation. For example, any lost income, or lost earning capacity (ability to earn income).

Actual damages can also include losses for which money is only a rough substitute, such as shame, mortification, or pain and suffering experienced by the plaintiff.

Presumed Damages. Presumed damages (also called assumed damages) are those that, in the eyes of the law, necessarily result from the publication of some kinds of defamatory matter (they are presumed to exist). In other words, even if the plaintiff cannot prove actual damages, the court can assume that the plaintiff has suffered harm to his or her reputation or some other loss.

Presumed damages are not usually available for slander (oral defamation) or defamation per quod (which means situations where the statement is not obviously defamatory, and the harmful impact of what was said/written must be shown).

There is no fixed standard when it comes to how courts calculate presumed damages. The amount can be a "nominal," meaning an amount as low as one dollar in some cases.

Punitive Damages. Punitive damages are designed to punish the defendant for particularly egregious conduct, and to deter such conduct in the future. To obtain punitive damages, the plaintiff usually needs to show that the defendant acted with malice or fraud.

Availability Of Damages

The underlying facts of the alleged defamation will shape the types of damages available.

Libel v. Slander. Generally, a statement that is made in writing is libel, and an oral statement is considered slander. Presumed damages are typically available in libel actions, but are not usually possible in slander cases. (Learn more about the legal elements of libel and slander.)

Defamation Per Se v. Defamation Per Quod. Defamation per se means that the statement is obviously defamatory; the court does not have to interpret or study the defamatory statement to know that it would harm the plaintiff. With defamation per quod, on the other hand, the plaintiff usually needs to provide an explanation as to why the statement is defamatory. This is common where the defamatory statement is an inducement or innuendo. With defamation per se, presumed damages are usually available. Defamation per quod typically requires proof of actual damages.

Calculating Actual Damages

Calculating damages depends heavily on the facts of your particular case. Usually, plaintiffs will engage an expert in economics to perform a damages analysis.

With respect to losses to the plaintiff’s business or profession, the damages suffered are usually measured by the difference between the plaintiff’s actual earnings and the plaintiff’s projected earnings, but for the defendant’s actions.

So, the first step in calculating damages is to project the plaintiff’s revenue based upon his or her life expectancy and retirement age. To do so, the expert must first analyze the plaintiff’s historical earnings. Then, the expert will calculate the future revenue and earnings based upon the plaintiff’s damaged reputation, and compare that data to the revenues and earnings projections as if no damage had been done.

As you might suspect, this isn't an exact science. It involves calculated specualtion. The expert will rely on a multitude of factors—including the plaintiff’s income tax returns and W-2s, the state of the economy and state of the industry in which the plaintiff is engaged—and the plaintiff’s business calendar (to show that there was a decline in business appointments), as well as the salary of other people engaged in the same industry who have education and training similar to that of the plaintiff.

Mitigating Damages in a Defamation Case

Damages may be mitigated, or reduced, by the defendant. For example, some states allow a defendant to mitigate damages by publishing a retraction. However, in order to take advantage of this doctrine, courts usually require that the defendant inform the plaintiff in writing of the intent to publish the retraction prior to the deadline for filing the Defendant’s Answer to the lawsuit.

A plaintiff may also have a duty to mitigate damages. For example, if the plaintiff lost a job as a result of the defamation, and could have taken another job for lesser pay, but didn't do so, the defendant might not be on the legal hook for the amount the plaintiff would have made by accepting the lesser-paying job. Learn more about what to expect in a civil lawsuit for defamation.