Calculating Damages in a Defamation Case

Learn about determining your compensable losses in a defamation case.

Defamation of character is a wrongful act where someone makes a false statement of fact 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.

Types Of Damages

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. The purpose of compensatory damages is to restore the injured party, as nearly as possible, to his or her rightful position -- the position he or she would have been in had he or she not been wronged.

Actual damages include all damages that the plaintiff has suffered with respect to his or her property, business, trade, profession or occupation. For example, any lost wages, or lost earning capacity.

Actual damages also include any out-of-pocket expenses the plaintiff had to pay as a result of the defamatory statements, such as medical expenses for seeing a psychiatrist. Actual damages can also include losses for which money is only a rough substitute, such as shame, mortification, or hurt feelings experienced by the plaintiff.

Assumed Damages.  Assumed damages (also called presumed damages) are damages that necessarily result from the publication of the defamatory matter and 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 experienced shame, mortification, or hurt feeling.

Generally, assumed damages are not available for slander (oral defamation) or defamation per quod (situations where the statement is not obviously defamatory).

There is no fixed standard in how courts calculate assumed damages. Further, the amount of assumed damages can be a nominal, meaning an amount as low as one dollar.

Punitive Damages.  Punitive damages are damages 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 type of defamation alleged will determine the types of damages available.

Libel v. Slander.  Generally, a statement that is made in writing is libel, and an oral statement or gesture is slander. Assumed damages are available in libel actions, but not in slander cases.

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 harmed the plaintiff. With defamation  per quod, on the other hand, the plaintiff 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, assumed damages are generally available. Defamation  per quod 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 an economic damage analysis.

With respect to losses to the plaintiff’s business or profession, the damages suffered are usually measured by the difference in the plaintiff’s actual earnings from 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 calculate the plaintiff’s historical earnings. Then, the expert will calculate the future revenue and earnings based upon plaintiff’s damaged reputation, and compare that data to the revenues and earnings projections as if no damage had been done.

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

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 defendant’s intent to publish the retraction prior to the deadline for filing Defendant’s Answer to the  defamation 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, the defendant may be able to subtract the amount the plaintiff would have made by accepting the lesser-paying job.

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