The per diem method calculates non-economic damages by assigning a daily dollar amount to the claimant's suffering and multiplying by the number of affected days. It is a US-origin negotiation tool — not a legal rule — and it competes with the multiplier method as an alternative framework for framing general damages.
TL;DR.
Formula: Non-economic damages = Daily rate × Number of affected days. Daily rate is often pegged to the claimant's daily earnings ($200–$500/day typical). Works best for long-duration injuries with low medical bills. Some courts allow per diem arguments to juries; others restrict them.
The formula
Non-economic damages = Daily rate × Number of affected days
The “affected days” can mean the total recovery period, the number of days with documented symptoms, or (for permanent injuries) the claimant's remaining life expectancy. The daily rate is set by the claimant's attorney and must be justified.
Choosing the daily rate
| Approach | Rate basis | Example |
|---|---|---|
| Earnings-based | Claimant's daily earnings | $75K annual salary ÷ 365 = $205/day |
| Severity-based | Scaled by pain level (1–10 scale) | Pain level 6 × $50 base = $300/day |
| Minimum wage | Federal or state minimum wage × 8 hours | $7.25 × 8 = $58/day (federal floor) |
| Medical-cost-based | Daily treatment cost average | $120K total treatment ÷ 400 treatment days = $300/day |
Worked examples
| Injury | Daily rate | Duration | Per diem result | Multiplier result ($30K specials × 2.5) |
|---|---|---|---|---|
| Whiplash (6-month recovery) | $150/day | 180 days | $27,000 | $75,000 |
| Chronic pain (2 years) | $200/day | 730 days | $146,000 | $75,000 |
| Permanent disability | $250/day | 10,950 days (30 yrs) | $2,737,500 | $750,000 |
Key insight: The per diem method produces much higher numbers for long-duration injuries (chronic pain, permanent conditions) than the multiplier method. This is both its strength and its weakness — it can produce figures that appear unreasonably high.
Court treatment
| Jurisdiction | Per diem allowed? |
|---|---|
| Florida | Yes — permitted in closing argument |
| New Jersey | Yes — permitted |
| Missouri | Yes — permitted |
| California | Generally permitted |
| New York | Historically restricted — varies by court |
| Federal courts | Mixed — depends on circuit |
Per diem vs multiplier: when to use each
| Use per diem when | Use multiplier when |
|---|---|
| Medical bills are low but suffering is long | Medical bills are high relative to suffering duration |
| Chronic pain with minimal treatment costs | Acute injury with expensive surgery + rapid recovery |
| Permanent impairment with extended life expectancy | Full recovery within 12 months |
Limitations
- Arbitrary daily rate. Unlike medical bills, the daily rate has no objective basis. This makes it vulnerable to challenge.
- Duration debates. Adjusters will argue that suffering diminishes over time, making a flat daily rate unrealistic.
- Court restrictions. Not all jurisdictions permit per diem arguments.
- No international application. The per diem method is a US practice — it has no application in the UK, Ireland, Canada, or Australia.
Frequently asked questions
What is the per diem method?
The per diem method calculates pain and suffering damages by assigning a daily dollar rate (per diem) to the claimant's suffering and multiplying by the number of affected days. For example, $150/day × 365 days = $54,750 in non-economic damages.
How do you choose the daily rate?
Common approaches include: the claimant's daily earnings (the argument being that enduring pain is at least as burdensome as working), a rate derived from the severity of symptoms, or a jurisdiction-specific benchmark. There is no fixed rule — the rate must be justified to the adjuster or jury.
Do courts allow the per diem argument?
Some do, some don't. Courts in states like Florida, Missouri, and New Jersey have permitted per diem arguments. Courts in others (e.g. New York traditionally, some federal circuits) have restricted or prohibited them as speculative. Check your jurisdiction.
How does per diem compare to the multiplier?
The per diem method tends to produce higher values for long-duration, low-cost injuries (chronic pain with minimal medical bills) and lower values for short-duration, high-cost injuries (surgery with rapid recovery). Most practitioners calculate both and use the higher figure as their primary argument.
Sources
- Federal Judicial Center — pattern jury instructions
- American Bar Association — damages calculation methodologies
- Restatement (Second) of Torts — damages commentary
Editorial note. This guide explains the per diem method. It is not legal advice. See our full disclaimer.
📌Cite this article: “The Per Diem Method, Explained.” MyClaimWorth.com, May 2026. Accessed 2026. https://myclaimworth.com/articles/per-diem-method-explained