Why are future damages reduced to present value in Georgia injury cases?

· 2 min read

Future economic losses are converted to present value because a dollar paid today is worth more than a dollar that would have arrived years from now. Georgia law directs that awards for future expenses and lost earnings be expressed in today’s terms so the injured person receives a lump sum that, once invested, would replace the future stream without overpaying.

The reasoning behind the reduction

If a jury simply added up every future medical bill or lost paycheck and handed over that total today, the injured person would be over-compensated. The reason is that money received now can earn interest before each future loss would actually occur. To correct for this, the law discounts future amounts back to what they are worth at the time of the verdict, a figure called present value or present cash value.

The principle is sometimes summarized this way: a sum invested today grows over time, so the amount needed now to cover a future cost is smaller than the future cost itself. Reducing future damages to present value keeps the award tied to the real economic loss rather than inflating it.

How Georgia frames the calculation

Georgia addresses this directly by statute. O.C.G.A. § 51-12-13 allows the trier of fact to reduce future medical expenses, lost wages, and other future economic damages to present value, applying a discount rate of five percent or another rate the fact-finder considers appropriate. The statute also limits certain evidence; it is not a vehicle for introducing the cost of a specific investment product such as an annuity.

A few points follow from this framework:

  • The reduction applies to future economic items, not to a single, already-incurred past expense.
  • The jury, as fact-finder, decides the appropriate discount rate within the statutory framework.
  • The goal is a present sum that fairly stands in for losses spread across future years.

This is also why future-loss testimony often involves an economist or similar witness who can translate a projected stream of expenses or earnings into a present-day figure the jury can use.

The bottom line

Georgia reduces future damages to present value so an injured person is made whole without receiving a windfall. Because money awarded today can be invested before future losses come due, O.C.G.A. § 51-12-13 lets the fact-finder discount those future amounts to their worth at the time of trial.

This article is for general educational and informational purposes only and is not legal advice. It does not create an attorney-client relationship, and Georgia law may change. For advice about a specific situation, consult a licensed Georgia personal injury attorney.

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