What is the Average Payout for Birth Injury?

What is the Average Payout for Birth Injury?

Every year, families across the U.S. receive birth injury settlements that range from hundreds of thousands to millions of dollars. Some payouts climb past $10 million—life-changing amounts meant to cover a lifetime of medical care, therapies, and support.

So, what’s the average payout for a birth injury claim? Well, rather than looking for a simple "average" payout, which doesn't truly exist due to the unique nature of each case, it's more helpful to understand what a settlement is intended to cover. For severe birth injuries like cerebral palsy, the financial needs can be immense, encompassing:

• Ongoing medical treatments and therapies
• Adaptive equipment and home modifications
• Special education needs
• Lost future earning capacity
• Pain and suffering

At the Cerebral Palsy Lawyer Alliance, our network of lawyers connects families like yours to local attorneys who fight for every dollar you’re owed. Call (888) 894-9067 today, and we’ll get you in touch with someone who can review your case—for free.

What Is a Birth Injury Settlement?

When a newborn suffers an injury because a healthcare provider didn’t do their job right, the law doesn’t just step in. The injured party, through their family, must hire a lawyer to seek compensation. That lawyer will try to obtain a settlement.

A birth injury settlement can cover the damage. One side pays, while the other agrees to drop the cerebral palsy lawsuit.

No two settlements are the same, but they share one thing in common: the goal is to provide for the child’s needs—medical, financial, and otherwise.

Why Families Seek Settlements

No parent wants to be here. But the reality is that long-term medical costs for birth injuries—especially conditions like cerebral palsy—add up fast.

Think decades of therapy, surgeries, adaptive equipment, and possibly 24-hour care. Health insurance rarely covers everything. A settlement fills in the gaps.

How Birth Injury Settlements Happen

Here’s how it typically goes:

• A medical mistake is made. Maybe the doctor ignored signs of fetal distress. Maybe they delayed a C-section for too long.
• The child suffers an injury. This could be brain damage from lack of oxygen (hypoxic-ischemic encephalopathy), or nerve damage during delivery (brachial plexus injury).
• A claim is filed. The parents—or their attorney—accuse the healthcare provider or hospital of negligence.
• Negotiations start. Lawyers for both sides argue about fault and damages.
• A settlement is reached. Most cases end here. If they don’t, it heads to trial.

Settlements vs. Trial Verdicts

Settlements are private deals. They offer certainty. Once the ink dries, you get your money and move on.

Trials are public and riskier. You could win big—or walk away with nothing. According to data from the U.S. Department of Justice, over 90% of medical malpractice cases settle before trial. Birth injury claims follow the same pattern.

Legal Basis for Birth Injury Claims

Most birth injury cases fall under medical malpractice law. Plaintiffs argue that a healthcare professional failed to meet the accepted standard of care, which directly caused harm.

In legal terms, it’s negligence.

Each state has its own laws governing these cases.

For example:

• Arizona: Plaintiffs must show a breach of the standard of care under A.R.S. § 12-563.
• Florida requires pre-suit investigation and expert affidavits under Florida Statutes § 766.203.

Payouts for a Birth Injury Claim

The range of payouts for birth injuries claims is massive because every injury—and every life it impacts—is different. The law aims to make families “whole” again. Not in an emotional sense—money doesn’t fix that. But it covers the practical stuff.

General Ranges for Settlements Depending on the Severity of the Injury

On the lower end, settlements for mild injuries typically range from $100,000 to $500,000. These cases may involve conditions like minor shoulder dystocia or fractures that heal completely without complications.

In the middle, claims involving moderate injuries—cases that require surgeries, therapy, and cause some permanent limitations—fall between $500,000 and $1 million. These may include moderate brachial plexus injuries or partial brain injuries with less severe outcomes.

At the high end, severe injuries resulting in profound disabilities—such as cerebral palsy caused by hypoxic-ischemic encephalopathy (HIE)—frequently lead to settlements or verdicts of $5 million to $10 million, sometimes more.

Settlements vs. Jury Awards

Settlements and jury verdicts aren’t the same thing. Recall that most birth injury cases settle before they ever get to a courtroom.

When a case does go to trial and the plaintiff wins, jury awards tend to be larger—but there’s no guarantee. Juries can be unpredictable. And even a big verdict can decrease on appeal or through statutory caps.

For example, Maryland caps non-economic damages in medical malpractice cases. In one recent year, it capped damages at $875,000, with an extra $25,000 if the wrongful act resulted in death and the case involved two or more claimants (Maryland Courts and Judicial Proceedings § 3-2A-09).

Structured Settlements vs. Lump Sum Payments

Some families receive their settlement as a lump sum. Others choose—or are required by the court—to accept a structured settlement. That means they get paid in installments over time.

Structured settlements offer tax benefits and ensure long-term financial support. But they’re less flexible. Lump sums provide immediate access to large amounts of money, which can help if a family needs to make significant modifications to their home or pay off medical debt.

The decision between the two depends on the circumstances and what works best for the family’s future planning.

Factors That Affect Birth Injury Settlement Amounts

The size of a payout depends on a handful of factors. Some are easy to measure. Others take expert analysis and testimony to figure out. Either way, these numbers dictate how much compensation a family receives.

Severity of the Injury

The biggest driver of settlement amounts is the severity of the injury. A mild fracture that heals completely in a few weeks doesn’t command the same compensation as a brain injury that leads to permanent cognitive impairment.

Severe injuries require more medical intervention, more therapy, and more long-term care. The law calls these damages—the measurable harm done to the child and the family.

For example, a child with cerebral palsy caused by hypoxic-ischemic encephalopathy may need surgeries, mobility aids, and personal care assistance for the rest of their life. The cost of that care doesn’t just add up—it multiplies over decades. Settlement amounts reflect those long-term realities.

Type of Injury

Not all injuries have the same impact on a child's life. Some conditions might heal fully; others reshape everything about the child's future. Here’s how that plays out.

Cerebral Palsy

Cerebral palsy ranks high on the list of injuries tied to large settlements. It’s a permanent condition that affects movement, muscle tone, and posture.

Many cases trace back to hypoxic-ischemic encephalopathy (HIE)—a type of brain damage caused by lack of oxygen during labor or delivery.

Symptoms vary. Some kids walk with difficulty; others need wheelchairs. Some speak; others don’t.

But one fact stays constant: cerebral palsy leads to lifelong expenses. Physical therapy, occupational therapy, speech therapy, surgeries, medication—the list goes on.

In severe cases, 24-hour care becomes necessary. Life expectancy depends on the severity but can extend into adulthood, which increases long-term care costs. These realities make cerebral palsy cases some of the highest-value settlements in birth injury claims.

Brachial Plexus Injuries (Including Erb’s Palsy)

The brachial plexus is a network of nerves running from the spinal cord through the neck to the arms. During delivery, these nerves stretch or tear when too much force is applied, especially during shoulder dystocia.

Erb’s palsy, one of the most common brachial plexus injuries, leads to weakness or paralysis in the affected arm. Some children recover after therapy and surgery; others live with limited function for life.

Settlements depend on:

• Whether surgery works
• The degree of permanent disability
• The child’s ability to perform daily activities independently

Less severe cases result in lower settlements, while permanent loss of arm function increases the amount.

Brain Damage / Hypoxic-Ischemic Encephalopathy (HIE)

When oxygen and blood flow to a baby’s brain slow or stop during labor, HIE occurs. It’s a major cause of cerebral palsy, seizures, and developmental delays.

Children with HIE-related brain damage may need:

• Feeding tubes
• Breathing assistance
• Specialized education programs
• Round-the-clock care

HIE cases usually involve mistakes like failing to monitor fetal heart rate or delaying a necessary C-section. As a result, these cases tend to result in large settlements because of the lifelong costs associated with severe brain injuries.

Spinal Cord Injuries

Spinal cord injuries during birth are rare but devastating. They usually happen when doctors misuse forceps or vacuum extractors, apply excessive traction, or make surgical errors.

Injuries high on the spinal cord may cause:

• Paralysis from the neck down (quadriplegia)
• Loss of respiratory function
• Inability to regulate body temperature or blood pressure

Given the severity, these cases demand high settlements to cover lifetime care, assistive technology, and home modifications.

Fractures and Broken Bones

Fractures typically happen during difficult deliveries, particularly when the baby’s shoulders get stuck behind the mother’s pelvic bone (shoulder dystocia). The clavicle is the most commonly broken bone in newborns.

Most fractures heal completely, but if the bone is improperly set or if nerve damage accompanies the break, permanent issues may arise. Unless complications develop, these cases generally result in lower settlement amounts.

Facial Paralysis

Facial paralysis in newborns usually results from improper forceps use during delivery. Damage to the facial nerve (cranial nerve VII) can cause part of the face to droop, affecting feeding and expression.

Mild cases resolve on their own within weeks.

Severe cases may require:

• Surgery to repair the nerve
• Physical therapy to regain movement
• Ongoing treatment to address speech or feeding issues

Future Medical Needs

Future care costs play a major role in calculating settlements.

This includes:

• Surgeries (planned and potential)
• Therapy (physical, occupational, speech)
• Medications
• Assistive devices (wheelchairs, communication aids)
• Home modifications (ramps, widened doorways)
• Vehicle modifications (accessible vans)

Impact on Quality of Life

Money can’t buy a better quality of life, but it can provide the resources to make life more manageable. Courts and insurance companies factor in how the injury affects the child's ability to function independently. If the child will need constant supervision or won’t participate in everyday activities like school, sports, or work, settlements increase.

Pain, suffering, and emotional distress fall into this category. While harder to quantify, they remain a real part of the equation.

Lost Future Earnings

When an injury prevents a person from ever entering the workforce, their potential earnings are part of the damages. Economists calculate what the child would likely have earned over their lifetime, adjusting for things like inflation, education, and career trajectory.

Texas, for example, includes future lost earnings as an established category of damages under Tex. Civ. Prac. & Rem. Code § 41.0105. Plaintiffs present evidence from vocational experts and economists to justify these projections.

Parental Lost Wages and Caregiving Costs

Parents sometimes leave their jobs or reduce hours to become full-time caregivers. Courts recognize this lost income as an additional financial strain.

Some settlements compensate for:

• Lost wages
• Lost career opportunities
• The cost of hiring professional caregivers if parents can’t provide round-the-clock care themselves

Strength of the Evidence

Cases with clear, well-documented negligence tend to settle for higher amounts. Strong evidence shortens the negotiation timeline and reduces the chance of a drawn-out trial. Medical records, expert opinions, and witness testimony all build the case.

If a hospital’s staff failed to monitor fetal heart rate properly, and records show prolonged distress, it’s easier to prove negligence.

On the other hand, gray areas—where it’s less clear who’s at fault—reduce the likelihood of a large payout.

State Laws and Damage Caps

Some states limit the amount a plaintiff recovers for certain types of damages, regardless of the circumstances. These caps apply to non-economic damages, like pain and suffering, not economic damages like medical bills.

For example:

• California set a MICRA (Medical Injury Compensation Reform Act) cap on non-economic damages at $250,000 for decades. In 2022, it started increasing, with a cap of $350,000 for injuries in 2023 and incremental increases thereafter.
• Florida Statutes § 766.118 capped non-economic damages in medical malpractice cases at $500,000 for practitioners and $1 million in cases of death or permanent vegetative state. However, the Florida Supreme Court struck down these caps in McCall v. United States, 134 So. 3d 894 (Fla. 2014) for wrongful death cases, and in North Broward Hospital District v. Kalitan, 219 So. 3d 49 (Fla. 2017) for personal injury cases.

Knowing whether caps apply—and how courts interpret them—directly affects settlement amounts. Attorneys factor this in when calculating potential recovery.

Secure Your Child’s Future—Starting Today

At the Cerebral Palsy Lawyer Alliance, our network of lawyers connects families to attorneys who know how to get results. Call (888) 894-9067 today, and we’ll put you in touch with someone who can review your case—for free.