Tort Compensation Guide — Heads of Damages and Full Calculation

What is Tort Compensation and How is it Calculated?

Tort compensation is a monetary sum determined by a court or agreement between parties, intended to compensate the injured party for damages caused as a result of a wrongful act (an unlawful action or omission). Contrary to popular belief, compensation is not a "penalty" for the person who caused the damage — it is a payment intended to compensate the injured party for the damage they themselves suffered.

When a person is injured in a traffic accident, workplace accident, or as a result of public negligence, they are entitled to file a tort claim. The claim may be against the party that directly caused the damage (driver, employer), against an insurance company, or against the National Insurance. Compensation calculation is based on several different heads of damages, each of which reflects a different aspect of the damage caused.

In our experience at Mandelbaum, Gaur, Witsman-Gaur and Partners, with over 18 years of representing claimants exclusively in tort law, we have seen that a deep understanding of the heads of damages and the ways they are calculated is the key to protecting the injured party's rights. This page offers a complete guide to help you understand the structure of the claim and the factors affecting the final compensation amount.

Primary Heads of Damages in a Tort Claim

When a court or authorized body calculates tort compensation, it examines several separate heads of damages. Each head of damages reflects a different aspect of the total damage, and they do not accumulate automatically — each is assessed according to the circumstances of the case.

1. Bodily Injury

This is the most basic head of damages. It includes all physical injuries caused as a result of the accident or wrongful act: fractures, burns, soft tissue injuries, permanent disabilities, etc. Assessment of bodily injury is done prospectively by a medical committee appointed by the National Insurance or by an expert appointed by the court. The committee determines disability percentages, which serve as the basis for calculating compensation.

2. Loss of Income

When an injured party cannot work as a result of their injury, they are entitled to compensation for loss of income. This includes income lost in the past (from the date of the accident to the date of trial) and income expected to be lost in the future, according to the disability percentage determined and the injured party's life expectancy. This calculation is complex and requires proof of prior income and valuation of future income.

3. Pain and Suffering

This head of damages covers the physical pain and emotional suffering experienced by the injured party as a result of the injury. Unlike bodily injury, which is measurable through medical examination, pain and suffering is subjective and requires assessment by the court. The compensation amount for suffering depends on the degree of pain, duration of treatment, and the impact of the pain on the quality of life of the injured party.

4. Disfigurement

When an injury leaves visible scars, burns, or other physical deformities, the injured party is entitled to additional compensation for disfigurement. This is particularly important when the disfigurement is located in visible parts of the body (face, hands, neck) and may affect the social and employment life of the injured party.

5. Medical and Rehabilitation Expenses

Any expense incurred as a direct result of the injury is entitled to compensation: medical treatments, surgeries, medications, physiotherapy, medical assessments, home modifications or assistive devices (wheelchair, walker, etc.). These expenses must be documented and proven.

6. Future Earning Capacity Loss

If the injured party cannot return to their former job but can still work in another position with lower income, they are entitled to compensation for loss of future earning capacity. This is usually calculated as the difference between the income they could have earned in their original job and the income they can now earn.

7. Future Care and Nursing Costs

In serious cases where the injured party will suffer significant loss of earning capacity or will require ongoing care, the court may award compensation for anticipated future care and nursing expenses. This may include costs for home care, ongoing medical treatment, and housing supplements.

How is compensation calculated in practice?

Calculating compensation in tort law is not a simple process that applies a fixed formula. Each case is examined on its own merits, and the judge or authorized body considers several factors:

Step 1: Determining the degree of disability

The first step in calculating compensation is determining the degree of disability of the injured party. This is done by a medical committee appointed by the National Insurance Institute, or in certain cases by an expert appointed by court order. The committee examines the medical condition of the injured party and compares it to a table of disability percentages established by law. The disability percentages reflect the extent of impairment to the injured party's earning capacity.

For example, an injured party who suffered a 20% disability to their right hand may still be able to work, but with reduced income. In contrast, an injured party with an 80% disability may be almost unable to work at all.

Step 2: Determining the "disability table"

In Israel, there is a table of disability percentages established by law. This table presents the percentage of disability for each type of injury or illness. For example, loss of a small finger may be 5%, loss of an entire hand may be 60%, and so on. The medical committee uses this table as a starting point, but may adjust the percentage according to the specific circumstances of the case (age, prior medical condition, etc.).

Step 3: Calculating compensation for bodily injury

After determining the disability percentages, the court or authorized body uses an additional table of amounts to determine compensation for bodily injury. The amount varies according to the age of the injured party, prior medical condition, and life expectancy. Typically, a young injured party with a high degree of disability will receive higher compensation than an older injured party with the same level of disability.

Step 4: Calculating loss of income

After determining compensation for bodily injury, the court considers loss of income. This requires proof of the injured party's prior income (tax returns, pay stubs, employment contract) and projection of future income according to the disability percentage. Typically, compensation for loss of income is calculated as a certain number of years of full income, reduced according to the disability percentage.

For example, if an injured party earned 10,000 shekels per month before the accident, and it is determined that they have a 50% disability, they may be entitled to compensation for 50% of their income for a certain period.

Step 5: Assessment of pain and suffering

Typically, the court awards compensation for pain and suffering as a percentage of compensation for bodily injury. The amount depends on the degree of pain, duration of treatment, and its impact on quality of life. For example, compensation for pain and suffering is typically awarded at a rate of 30–100% of compensation for bodily injury, depending on the severity of the case.

Step 6: Additional expenses

Finally, the court adds all direct expenses: medical expenses, physiotherapy treatment, home modifications, assistive devices, etc. These expenses must be documented and proven by receipts and invoices.

Comparative Table of Typical Compensation Ranges

The following table presents typical compensation ranges in various claims. It is important to emphasize that these are general ranges only, and actual compensation depends on the specific circumstances of each case:

Important Note: This table presents typical ranges only and does not constitute a guarantee or valuation of compensation in your specific case. Each case is assessed individually, and the final compensation amount may differ substantially depending on your unique circumstances. To obtain an accurate valuation, personal legal consultation with an experienced tort law attorney is necessary.

Tort Claims: Who is the Defendant and What is the Process?

When an injured party decides to file a tort claim, they must decide against whom to file it. Typically, the claim may be filed against one of the following parties:

Claim Against the Party Who Directly Caused the Injury

For example, in a motor vehicle accident, the claim would be against the driver who caused the accident. In a workplace injury, the claim may be against the employer or contractor. In cases of medical negligence, the claim would be against the physician or medical institution.

Claim Against the Insurance Company

In many cases, the defendant's insurance company covers the liability. Typically, the claim is filed directly against the insurance company, as it has the financial capacity to pay the compensation.

Claim Against the National Insurance Institute

In certain workplace accidents, the injured party may file a claim against the National Insurance Institute, particularly when the employer is uninsured or when the National Insurance Institute has determined that the accident resulted from illness or systematic working conditions.

Stages of the Process

The tort claim process typically includes the following stages:

1. Medical Certification: The injured party must have a medical certificate documenting the injury and its impact.
2. Medical Assessment: A medical committee determines the percentage of disability.
3. Filing a Claim: An attorney representing the injured party files a formal claim against the defendant or insurance company.
4. Negotiation: Typically, there is an attempt to reach a settlement between the parties.
5. Court: If no settlement is reached, the case is brought before the court, where a full judicial proceeding is conducted.
6. Judgment: The court determines the amount of compensation.

Important Tips for Accident Victims

If you are injured in an accident and are considering filing a tort claim, here are some important tips:

1. Preserve All Medical Documents

Every medical certificate, examination report, photograph of the injury, medication receipt, and receipt for medical expenses — all of these are important to prove the damage. Keep organized copies of every document.

2. Document the Impact on Your Daily Life

Keep a journal documenting how the injury affects your ability to work, study, move, and enjoy social life. This will help in assessing pain and suffering.

3. Do Not Accept a Settlement Hastily

If the insurance company or defendant offers a settlement, do not accept it hastily. Consult with an attorney to ensure the settlement is fair and reflects all your damages.

4. Contact an Attorney as Soon as Possible

The sooner you contact an attorney, the better. An attorney can help you prepare for the medical committee, obtain evidence, and protect your rights from the outset.

5. Be Honest and Direct in Conversations with the Medical Committee

When speaking with the medical committee, be honest and direct about your injuries. Do not exaggerate or understate — this could harm your case.