The distinction between pecuniary and non-pecuniary loss is important for several reasons. Firstly, it helps in accurately assessing the compensation amount to be awarded. Pecuniary damages can be objectively measured and quantified based on actual financial losses, while non-pecuniary damages involve subjective evaluation of intangible harm.
Secondly, the distinction helps in ensuring fairness and preventing arbitrary or excessive compensation. By separating pecuniary and non-pecuniary damages, the legal system can provide appropriate compensation for financial losses while recognizing and compensating for the emotional, physical, and psychological impact experienced by the plaintiff.