Calculating Compensation and Damages: The Complete Economic Guide to Birth Injuries

Calculating Compensation and Damages: The Complete Economic Guide to Birth Injuries

When a baby is injured during birth due to medical malpractice, the family doesn't only face the emotional trauma and daily challenges — it also confronts enormous financial obligations: expensive medical treatments, prolonged rehabilitation, special education, and the need for ongoing care for decades to come.

Compensation in birth injury claims is generally the highest of all types of lawsuits — and for good reason. This is compensation designed to cover all of the child's needs for their entire life.

In this comprehensive article, we will explain:

• What are the "heads of damage" — the different components of compensation
• How each component is calculated
• What factors affect the compensation amount
• Detailed calculation examples
• How to ensure you receive the maximum compensation

The Overall Structure of Compensation

Compensation in a birth injury claim consists of two main categories:

1. Compensation for the Child (the Injured Infant)

This is the primary and largest portion of the compensation. The child is entitled to compensation for:

• Pain and suffering
• Medical expenses (past and future)
• Rehabilitation and treatment costs
• Special education expenses
• Caregiver assistance
• Future loss of earning capacity
• Housing adaptations
• Special equipment
• Mobility

2. Compensation for the Parents

The parents are entitled to separate compensation for:

• Financial expenses they incurred
• Loss of earnings (if they stopped working to care for the child)
• Mental health treatment for the parents

Important to understand: These are two separate claims, but they are usually filed together.

Heads of Damage — Full Breakdown

Damage Category 1: Pain and Suffering of the Child

This is the most fundamental and central component of the compensation.

What is "Pain and Suffering"?

• The physical pain the child endures
• Emotional distress
• Impairment of quality of life
• Loss of enjoyment (things a healthy child could do)
• Humiliation and embarrassment (as the child grows and understands their condition)

How is the Amount Determined?

There is no fixed formula! It is at the court's discretion, based on:

A. Severity of the Injury

Severity scale:

Mild-to-moderate injury:

• Mild Erb's Palsy with partial recovery
• Mild neurological damage without cerebral palsy

Moderate injury:

• Severe Erb's Palsy with permanent arm disability
• Mild cerebral palsy (can walk and talk, but with difficulty)

Severe injury:

• Moderate cerebral palsy (needs help with daily activities)
• Significant brain damage with intellectual disability

Catastrophic injury:

• Severe cerebral palsy (bedridden, cannot speak, cannot walk)
• Severe brain damage with total dependency

B. Life Expectancy

The longer the child is expected to live with the disability — the higher the compensation. Conversely, if the child's life expectancy was shortened due to birth injuries, they are also entitled to compensation for that reduction in life expectancy.

C. Impact on Development

A child injured at birth — the damage affects their entire life:

• Unable to learn like other children
• Unable to play, do sports
• Social difficulties
• Learning difficulties
• Difficulties with independence

All of this is taken into account.

D. Prior Court Rulings

Israeli courts look at similar cases that have been decided in the past.

Examples from Israeli court rulings:

Case 1: Severe Cerebral Palsy

• Baby injured during birth due to oxygen deprivation (Hypoxia)
• Quadriplegic cerebral palsy (all four limbs)
• Bedridden, cannot speak, requires 24/7 care
• Pain and suffering: ₪1,000,000 (NIS)

Case 2: Moderate Cerebral Palsy

• Hemiplegic cerebral palsy (both legs)
• Can walk with assistance, speaks, normal intelligence
• Pain and suffering: ₪800,000 (NIS)

Case 3: Erb's Palsy

• Brachial plexus injury during birth
• Right arm with limited function (cannot raise above shoulder)
• Pain and suffering: ₪250,000 (NIS, 2021)

Damage Category 2: Medical Expenses — Past and Future

This is the component that can reach astronomical sums.

Past Medical Expenses

Every medical expense from birth to the present day:

• Hospitalizations (neonatal ICU, pediatric wards)
• Surgeries
• Tests (MRI, CT, cranial ultrasound)
• Medications
• Medical equipment (catheters, ventilators)

Future Medical Expenses — The Complex Calculation

You must estimate all treatments the child will need — for their entire life.

However, it is important to remember that any expense covered by Israel's National Health Insurance (the "health basket") is covered by the health fund (kupat cholim), and the defendant does not need to bear it. The defendant must pay only for essential medical expenses that are not covered by the health funds' health basket.

Types of treatments that can be claimed, insofar as they are required beyond what is allocated by the health funds:

• Physiotherapy, hydrotherapy, hippotherapy (therapeutic horse riding), occupational therapy, speech therapy, psychiatric monitoring, psychological treatments

Medications not covered by the health basket

Medical equipment:

• Wheelchair (must be replaced every 5–7 years)
• Medical bed
• Assistive devices (walkers, braces)
• Catheters

Periodic tests (insofar as they are not included in the health basket):

• MRI, CT
• Blood tests
• Specialist doctor visits

How Are These Figures Calculated?

• Medical expert opinion (pediatrician, neurologist, orthopedist)
• Economic expert who calculates future costs
• Present value — money today is worth more than money in the future (interest discount)

Damage Category 3: Rehabilitation and Treatment Costs

Children with birth injuries require prolonged rehabilitation.

Types of Treatments

A. Physiotherapy

• To improve movement, strengthen muscles
• For children with cerebral palsy — essential!

Frequency:

• Severe cerebral palsy: 3–5 sessions per week
• Mild-to-moderate cerebral palsy: 1–3 sessions per week

B. Occupational Therapy (OT)

• Learning daily skills (eating, dressing, writing)
• Improving hand function

C. Speech Therapy

• For children with speech difficulties
• Help with swallowing (if applicable)

D. Psychological Treatment

• For the child (as they grow and understand their condition)
• For the parents (coping with the situation)

E. Additional Therapies

• Hydrotherapy (water-based therapy)
• Hippotherapy (equine-assisted therapy)
• Art therapy, music therapy

Damage Category 4: Caregiver Assistance

This is sometimes the most expensive component of the compensation!

Children with severe injuries require 24/7 care.

Types of Assistance

A. Early years (0–3): Every child needs help at this age, but a child with a disability — much more so.

B. Childhood (3–18): Depends on the severity of the disability.

Mild cerebral palsy:

• Assistance: 2–4 hours per day

Severe cerebral palsy:

• Assistance: 8–12 hours per day (almost 24/7)

C. Adulthood (18+): The child (now an adult) still requires assistance.

Mild-to-moderate cerebral palsy:

• Assistance: 2–6 hours per day

Severe cerebral palsy:

• Assistance: 12–24 hours per day (caregivers in shifts)

Damage Category 5: Future Loss of Earning Capacity

The injured child will not be able to work (or will work in a less lucrative job).

How is it Calculated?

Step 1: Determining Earning Capacity

A child without a disability:

• Could earn (on average): ₪14,000 per month
• Starting from age 22 (after military service/studies)
• Until age 67 (retirement)
• 45 working years

A child with mild cerebral palsy:

• Can work, but part-time or in a less lucrative position
• Estimated income: ₪7,000 per month
• Loss of 50% of earning capacity

A child with severe cerebral palsy:

• Unable to work at all
• Loss of 100% of earning capacity

Step 2: Calculating the Damage

Formula: Loss = (average salary − possible salary) × capitalization factor (since the compensation for future years is received as a lump sum today, the future amount is discounted by the interest/return that could be earned by investing that sum over the relevant period)

Example — 100% loss:

• Average salary: ₪14,000
• Working years: 45 (capitalization factor of 296, reflecting the advance payment discount as explained)
• Gross loss: 14,000 × 296 = ₪4,144,000
• This calculation assumes that on the date of the court ruling, the minor is 22 years old and would have had 45 working years ahead if not for the negligence. The younger the child is at the time of the calculation, the lower the amount, as the capitalization factor decreases accordingly
• In cases of partial loss of earning capacity, the compensation is reduced proportionally

Damage Category 6: Housing Adaptations

A child with a disability requires an adapted home.

Required Adaptations

A. Accessibility:

• Ramps
• Stairlift (if there is a second floor)
• Wide doorways (for a wheelchair)
• Handrails in bathrooms, in the shower

Cost: ₪50,000–200,000

B. Therapy room/space:

• Room for physiotherapy
• Special equipment (mats, rehabilitation apparatus)

Cost: ₪30,000–100,000

C. Adapted bathroom:

• Step-free shower
• Shower seat
• Handrails

Cost: ₪20,000–50,000

D. Larger housing: Sometimes the family needs to move to a larger apartment (to accommodate caregivers and equipment).

Cost: difference between a regular apartment and a larger one, for example: ₪300,000–500,000

Housing adaptation summary:

• Minimum: ₪100,000
• Average: ₪300,000
• Maximum: ₪800,000

Damage Category 7: Special Equipment and Aids

Beyond medical equipment, there is additional equipment:

• Vehicle adapted for a wheelchair, with a lift
• Adapted computer and communication devices
• Adapted toys and books

Parents' Compensation — Separate Heads of Damage

The parents are entitled to separate compensation:

1. Loss of Parental Earnings

If one of the parents (usually the mother) stopped working to care for the child.

2. Mental Health Treatment Costs for Parents (insofar as not covered by the health basket)

• Psychologist/psychiatrist
• Antidepressant medications

Factors Affecting the Compensation Amount

1. Severity of the Injury — The Primary Factor

The more severe the injury — the higher the compensation.

Quadriplegic cerebral palsy > Hemiplegic cerebral palsy > Erb's Palsy

2. Life Expectancy

A child with a life expectancy of 70 years will receive higher compensation than a child with a life expectancy of 30 years (because the damage persists for more years). Conversely, a child whose life expectancy was shortened due to the negligence will be entitled to separate compensation for "reduction of life expectancy."

3. Age of the Child at the Time of the Claim

A younger child = higher compensation (more years ahead).

4. Level of Parental Commitment

If the parents are committed to treatment and invest in rehabilitation — it positively affects the outcome:

• Shows that the compensation is truly needed
• Proves the scope of the treatments

5. Prior Court Rulings

Israeli courts look at similar cases previously decided.

6. Quality of Expert Opinions

Professional and detailed expert opinions — increase the compensation:

• Medical opinion from a leading specialist
• Detailed economic opinion
• Rehabilitation opinion

7. Quality of Legal Representation

An experienced attorney in the field = higher compensation.

How to Ensure You Receive the Maximum Compensation

1. Hire a Specialist Attorney

Birth injury claims are extremely complex.

A good attorney:

• Knows how to calculate every head of damage
• Is familiar with the case law
• Knows which experts to bring
• Will negotiate effectively

How much does it cost? Approximately 25% of the compensation (No Win – No Fee).

Is it worth it? Yes! A good attorney can double the compensation.

2. Invest in Expert Opinions

Don't skimp on expert opinions!

Required opinions:

• Medical: Pediatrician, neurologist, orthopedist
• Economic: Financial expert for damage calculation
• Rehabilitation: Physiotherapist, occupational therapist
• Educational: Special education expert

Is it worth it? Yes! Good expert opinions can add millions of shekels to the compensation.

3. Document Everything

From the beginning — document every expense:

• Receipts for treatments
• Receipts for medications
• Receipts for equipment
• Sick-leave approvals (for the parents)

Treatment journal:

• Write down what you did every day
• How much time you invested in care
• What the child needs

This will help prove the expenses.

4. Start Rehabilitation Early

The earlier you begin rehabilitation — the better:

• It improves the child's condition
• It demonstrates your commitment
• It justifies the compensation

Don't wait until the lawsuit is over!

5. Be Patient

Birth injury claims take time:

• 3–4 years on average
• Sometimes longer

Don't rush to accept a low settlement just because you are exhausted.

Common Mistakes That Reduce Compensation

Mistake 1: Not investing in expert opinions — "It's expensive, we'll manage without..." → Result: compensation is significantly lower.

Mistake 2: Not documenting expenses — "We'll remember later..." → Result: difficult to prove expenses, you lose money.

Mistake 3: Accepting an early settlement — "I'm tired of litigating, I'll accept the offer..." → Result: you receive half the compensation you're entitled to.

Mistake 4: Not providing rehabilitation for the child — "We'll wait until we get the money..." → Result: the child's condition worsens, and it hurts the claim.

Mistake 5: Hiring a non-specialist attorney — "A lawyer is a lawyer..." → Result: an inexperienced attorney doesn't know how to maximize the compensation.

Summary — Key Points

Remember:

• Compensation in a birth injury claim is the highest — we're talking about millions of shekels
• There are two categories: compensation for the child + compensation for the parents
• The main components: pain and suffering, medical expenses, rehabilitation, education, caregiver assistance, loss of earning capacity
• Caregiver assistance is sometimes the highest component (in severe cases)
• Expert opinions are essential — don't skimp!
• A specialist attorney is vital — the investment pays for itself many times over
• Document everything from the start
• Be patient — don't accept a low settlement

The compensation is designed to cover all of the child's needs for their entire life. This is a one-time opportunity — make sure you receive the maximum!

Contact a specialist birth injury attorney for professional legal advice.

This article provides general information only and does not constitute legal or financial advice.