Table of Contents. Overview of Data Needed by the Economist. Determining the Value of Employer Paid Benefits

Transcription

1 Table of Contents Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9 Chapter 10 Chapter 11 Chapter 12 Chapter 13 Chapter 14 Chapter 15 Chapter 16 Chapter 17 The Forensic Economist Overview of Data Needed by the Economist Past and Future Earnings Determining the Value of Employer Paid Benefits Adjusting for Personal Consumption and Support Factors The Value of Household Services Life and Worklife Expectancy How to Include Income Tax in the Evaluation Using Reports of Medical and Rehabilitation Experts Legal Opinions Interest Rates and Present Value A Sampling of Methods to Calculate Losses Putting It All Together Tactics and Strategy Hedonic Damages The Value of Human Life Special Unrelated Topics Structured Settlements Index F-5 (Rev. 24, 8/12)

2 Chapter 1 The Forensic Economist Determining Economic Damages F The Art and Science of Forensic Economics 101 Economic Logic and Legal Requirements 102 An Overview of Economic Services Available 103 What You Should Know About Forensic Economics 104 Effect of Economic Testimony on Awards 105 Perspective of This Book 106 Basic Definitions 110 What to Consider When Choosing an Expert 111 Local v. Outsider 112 Experienced v. Inexperienced 113 Impartiality 114 Contracts Between Lawyer and Economist Sample Agreement No Sample Agreement No Sample Agreement No Sample Agreement No Sample Agreement No. 5 Attorney General Sample Agreement No Consulting v. Testifying Expert 116 Economic Specialties 117 The Economist as Facilitator 120 Qualifying Your Expert 121 Education Specific Fields of Study 122 Publication Record 123 Association Memberships 124 Academic Rank 125 Experience 126 Communication Skills 127 Knowledge of Computers 130 How to Locate an Expert 131 Listing of Economists 140 What to Learn About your Expert Before Retaining Him 141 The Cost Contingency Fee Testimony Contingency Fee Rule 142 His Past Testimony 143 Applicability of Experience 144 His Personality 145 Availability 146 References 147 Read Your Expert s Publications Checklist: Choosing an Expert 148 What the Expert Can Do for the Plaintiff 149 What the Expert Can Do for the Defendant

3 F-7 Table of Contents 150 Qualifying Your Expert at Trial Sample: Questions for Qualifying Your Expert at Trial 160 Preparing the Expert for Trial Form: Preparing for Trial 170 Building a Profile Before the Expert Testifies 171 Honest Differences Between Economists 180 The Daubert Test Chapter 2 Overview of Data Needed by the Economist 200 In General 210 Demographic Data 211 Race, Sex, Date of Birth, Date of Incident, and Date of Trial 212 Education 213 Health History 214 Occupational History 215 Income History 216 The Unemployed Plaintiff 217 Household Services 218 Family Composition 219 Personal Consumption 220 Medically Related Data 221 Funeral, Burial, and Medical Expenses 222 Attendant Care and Nursing Homes 230 Life and Worklife Expectancy and Time to Trial 240 Earnings Growth Rates and Interest Rates 250 Occupational Earnings 260 Statistical Data 261 Tax Rates and Adjustments 262 Obtaining Government Data List: Regional Government Depositories List: Government Agency Addresses 263 Obtaining Union Data and Contracts 270 The Economist s Personal Library 271 Forensic Economics Bibliographies 272 Readings in Current Research 273 The Journal of Forensic Economics 274 The Journal of Legal Economics 275 The Litigation Economics Digest 276 The Earnings Analyst 280 Checklists for Obtaining Data Checklist: Information to Be Provided by the Attorney Checklist: Information to Be Provided by the Economist 281 Sample Questionnaires Sample: Personal Injury Questionnaire Sample: Wrongful Death Questionnaire Sample: Wrongful Birth/Life Questionnaire Sample: Wrongful Termination Questionnaire Sample: Addendum: Legal Considerations (Rev. 24, 8/12)

4 Determining Economic Damages F Specialized Questionnaires Sample: Combined Questionnaire Sample: Household Service Value Questionnaire New State Questionnaire 290 The Proper Order: Plaintiff or Defendant? Chapter 3 Past and Future Earnings 300 In General 301 Historical Wage Changes Table 1: Hourly Earnings Table 1A: Nominal Annual Wage Growth Table 1B: Growth Rates to The Continental Soldier Fallacy Table 1B.1: Continental Soldier Pay Per Day and Year 303 Loss of Earnings or Earning Capacity 304 Base Earnings 305 Federal and State Minimum Wages Table 1C: Federal Minimum Wage History Table 1D: State Minimum Wages Table 1E: Tipped Worker Minimum Wages 310 Wage Differences Among Occupations 311 The Causes of Wage Changes Table 2: Changes in Consumer Price Indexes Table 3: Productivity Trends 312 How Occupations Are Defined 320 Demographic Factors and Earnings 321 Education and Earnings Table 3A: Earnings by Education Probabilities of Completing Various Levels of School Table 4: Education, Age, and Earnings Table 4A: Levels of Education Table 4B: Educational Attainment of All Races Impact of Education of Parents Table 4C: Sons and Daughters Educational Attainment 322 Sex and Earnings Table 4D: Male v. Female Earnings 323 Race and Earnings Table 5: Race and Earnings 324 Age and Earnings Earning Capacity of the Minor Plaintiff 325 Geography and Earnings Economic Research Institute Table 6: Average Earnings by State Table 6A: Position Description Table 6B: Earnings in Base City Table 6C: Earnings in Destination City Table 6D: Relocation Comparisons Table 6E: Salary and CPI Equivalents

5 F-9 Table of Contents 326 Farmworker Earnings Farmworker Questionnaire Table 7: Weeks of Farmwork Per Year Table 7A: Farmworker Demographics Table 7B: Farmworker Earnings Table 7C: Hourly Farmworker Earnings 330 Using Statistical Data 331 Interpreting Indexes Table 8: Consumer Price Index: Medical Care Table 9: Index of Prices for Farmers 332 Using Union Contracts Table 10: Union Contract Excerpt 333 Using Cohort Tables Sample: Cohort Table Sample: Revised Cohort Table Cohort Tables With Age Brackets 334 The OASDHI Earnings Forecast CBO Interest Rate Forecast Table 11: OASDI Changes Table 11A: Congressional Budget Office Forecast Interest Rates Table 12: Prices, Wages, Interest Rates Fairmodel 335 Inflation Forecasts Table 13: The Livingston Survey Table 14: FRB Philadelphia Forecast 336 The Employment Cost Index 337 Additional Bureau of Labor Statistics Wage Studies Table 16: Occupational Employment Statistics Table 16A: National Compensation Survey 338 Additional Bureau of Labor Statistics Wage Studies 340 Plaintiff s Employment Status 341 The Unemployed Plaintiff 342 The Retired Plaintiff 343 The Minor Plaintiff 344 The Illegal Alien Plaintiff 345 Data Sources for Cases Involving Foreign Nationals 350 Other Types of Losses 351 Lost Business Profits 352 The Wrongfully Terminated Plaintiff 353 The Wrongful Birth Table 17: Cost of Raising Child Husband-Wife Families Table 17A: Cost of Raising Child Single-Parent Families Table 17B: Calculator Input Table 17C: Sample Child Cost Calculator Table 18: Forecasting College Costs Table 18A: Cost of College by State Valuing Children Wrongful Birth Pro Rata Cost Approach 354 Special Problems in Earnings Data 355 Losses in Foreign Currency 356 Children Supporting Parents 360 Perspective of This Chapter (Rev. 24, 8/12)

6 Chapter 4 Determining Economic Damages F-10 Determining the Value of Employer Paid Benefits 400 In General 410 Where to Find Benefit Information 411 Information From the Employee Client 412 Information From the Employer 413 Information From Unions 414 Information From the Department of Labor Table 19: Employer Costs Table 20: Hourly dollar Value of Employer Paid Benefits 415 Increases in Benefits Table 21: Growth Rate of Employer Paid Benefits 416 Social Security Credits and Ages 420 Specific Benefits 421 Paid Vacations and Sick Leave Pay 422 Life Insurance 423 Health Insurance Health Care Reform How to Obtain Health Insurance Premium Quotes Table 22A: Health Insurance Premium Quotes 424 Pensions and Retirement Plans 425 The Company Car 426 Expense Accounts and Other Miscellaneous Perks 427 Estimating the Loss of Social Security Retirement Benefits Table 22B: Estimates of Social Security Losses for Married Workers 430 Summarizing Lost Benefits List: Summary of Benefits 440 How to Determine the Loss Chapter 5 Adjusting for Personal Consumption and Support Factors 500 In General 510 Defining Personal Consumption and Support Factors 511 Family Lifetime Consumption Patterns 520 Historical Studies of Consumption 530 Support or Consumption Factors 531 When to Make the Adjustment 532 Unusual Circumstances 533 Consumption for the Single Person Table 22C: Expenditures by Income and Consumer Unit Size 540 Personal and Indivisible Consumption by Family Size and Income Table 22D: Consumption by Household Members, by Number of Persons in Household and Income Levels Savings Excluded as Consumption Item Table 22E: Log Regression of Household Income on Family Member Consumption 541 Personal Consumption by Husbands and Wives Table 22F: Personal Consumption Husband, Wife, No Children by Work Status Table 22G: Personal Consumption Husband, Wife, Children by Work Status

7 F-11 Table of Contents Chapter 6 The Value of Household Services 600 In General 610 What Are Household Services? 611 Measuring the Amount of Services Lost 612 Ask About Unusual Services 620 Years of Healthy Life and Full Function Life Table 23: Healthy and Full Function Life Expectancy 630 Adjusting Household Service Values 631 Self Consumption of Household Services 632 Joint Family v. Individual Service Value 640 Companionship, Advice, and Counsel Services Table 23A: Hourly Median Wages of Companionship Related Occupations Table 23B: Hourly Median Wages of Advice Related Occupations Table 23C: Suggested Hourly Quantities of Services Table 23D: Estimated and Suggested Annual Values of Services 650 Measuring the Loss 651 The Four General Approaches to Measuring Household Production of Services 652 The Dollar Value of a Day Table 24: Dollar Value Per Day 653 Hours of Household Work Based on Marital Status Table 24A: Household Work by Marital Status Chapter 7 Life and Worklife Expectancy 700 In General 710 Where to Locate Life Expectancy Tables Table 25: Life Expectancy for Males and Females Table 26: Mortality Tables 720 When to Use Joint Life Expectancy 730 Worklife Expectancy Tables Table 27: Worklife Expectancy for Men by Schooling Table 28: Worklife Expectancy for Women by Schooling 731 Date of Injury or Date of Trial 732 Active But Out of Work 740 Recent Worklife Model Innovations 741 Years to Workforce Separation Table 28A: Years to Workforce Separation Male Table 28B: Years to Workforce Separation Female Worklife Tables After The Skoog/Ciecka Worklife Tables 2003 Table 28C: Worklife Expectancy: Males, Active, by Education Table 28D: Worklife Expectancy: Males, Inactive, by Education Table 28E: Worklife Expectancy: Females, Active, by Education Table 28F: Worklife Expectancy: Females, Inactive, by Education Form 5500: Determination of the Average Retirement Age Table 28G: Form 5500 Data Years to Final Separation Table 28G.1: Years to Final Separation Females Table 28G.2: Years to Final Separation Males (Rev. 24, 8/12)

8 Determining Economic Damages F The Krueger Worklife Tables 2005 Table 28G.3: Worklife Expectancy of Males by Level of Education, Table 28G.4: Worklife Expectancy of Females by Level of Education, Full-Time v. Part-Time Worker Worklife Expectancy Table 28G.5: Full-Time and Part-Time Worklife Expectancy of All Males in the United States, Table 28G.6: Full-Time and Part-Time Worklife Expectancy of Males With Less Than a High School Education in the United States, Table 28G.7: Full-Time and Part-Time Worklife Expectancy of Males With a High School Education in the United States, Table 28G.8: Full-Time and Part-Time Worklife Expectancy of Males With Some College Education in the United States, Table 28G.9: Full-Time and Part-Time Worklife Expectancy of Males With at Least a 4-Year College Education in the United States, Table 28G.10: Full-Time and Part-Time Worklife Expectancy of All Females in the United States, Table 28G.11: Full-Time and Part-Time Worklife Expectancy of Females With Less Than a High School Education in the United States, Table 28G.12: Full-Time and Part-Time Worklife Expectancy of Females With a High School Education in the United States, Table 28G.13: Full-Time and Part-Time Worklife Expectancy of Females With Some College Education in the United States, Table 28G.14: Full-Time and Part-Time Worklife Expectancy of Females With at Least a 4-Year College Education in the United States, The Lost Years: Compensating for Reduced Life Expectancy 750 Information the Economist Will Need to Determine Worklife 760 Railroad Employees Worklife Expectancy Table 28G.15: Railroad Worker Worklife Expectancy (Age 39) 770 The Change in Average Retirement Age 771 Partial Year Calendar Table 28H: Partial Year Calendar Chapter 8 How to Include Income Tax in the Evaluation 800 First There Was Hall 810 Next There Was Liepelt 820 Then Came Shaw 830 Followed by Trevino 840 When to Make Tax Adjustments 850 Who Benefits From a Tax Adjustment? 860 Who Really Won 870 How to Make the Tax Adjustment Table 29: Federal Tax Brackets Table 29A: History of Tax Bracket Changes Table 29B: Tax Rate Calculator Table 29C: Marginal and Average Tax Rate Calculation Table 29D: Future Tax Brackets 871 Municipal Bonds An Alternative Solution to the Tax Problem

9 F-13 Table of Contents 872 Ratio of Municipal Bond Yields to Treasury Bond Yields Table 29E: Ratio of Municipal Bond Yields to Treasury Bond Yields 880 The Tax Adjustment in Wrongful Terminations 881 Taxes in District Court Awards Chapter 9 Using Reports of Medical and Rehabilitation Experts 900 In General 901 The Medical Expert 902 The Vocational Rehabilitation Expert Sample: Report Extract Opinion of Trial Court Judge 903 The Life Care Planning Expert Table 30: Rehabilitation Nurse Report Table 30A: Home Modification Costs Life Care Plan Development 904 Disability Ratings Using Disability Data to Estimate Worklife Disability and Relative Earnings Table 30B: Disability and Earnings 905 Earnings Capacity Mitigation 910 [Reserved] Table 31: [Reserved] 920 The Medical Care Cost Index Table 32: Indexes of Medical Care Costs Table 33: Medical Care Cost Growth Rates to Current Year Table 33A: Year-to-Year Changes in Medical Care Costs Table 33B: Definitions of Medical CPI Terms 921 Medical Care Price Increases Table 34: Medical Care CPI v. All Items CPI 930 The Life Expectancy Quandary 940 Useless Reports From Experts 950 Sequencing Your Experts at Trial Chapter 10 Legal Opinions 1000 In General 1010 Introduction to Opinion Listings 1020 List of Opinions Chapter 11 Interest Rates and Present Value 1100 In General 1110 What Determines an Interest Rate? 1111 The Link Between Interest Rates and Earnings Growth Rates 1112 Adjusting Interest Rates for Transaction Costs 1113 Future Interest Rate Changes Future Interest Rate Decreases (Rev. 24, 8/12)

10 Determining Economic Damages F Some Definitions You Need to Know 1130 What to Consider When Choosing an Interest Rate 1131 Simple Interest v. Compound Interest 1132 The Changing Value of Money Over Time 1133 The Five Time Value Variables Diagram: The Time Line 1134 Treasury Accord 1140 Bringing Past Losses to the Present 1141 How Trial Delays Change the Present Value 1150 How Often Do You Discount? 1160 How Much Difference Does One Percent Make? 1170 Using Stripped Treasuries 1171 TIPS (Treasury Inflation Protected Securities) and TIIS (Treasury Inflation Indexed Securities) 1172 Note on Interest Rates Reported by the Federal Reserve 1173 The Mirror Image Method Chapter 12 A Sampling of Methods to Calculate Losses 1200 In General 1201 The Alaska Method, or Total Offset 1202 The Partial Offset Method 1203 The Real Rates Method 1204 The Nominal Rates Method 1205 The Geometric Mean v. the Arithmetic Mean Table 38: Arithmetic v. Geometric Mean 1206 Net Discount Rate (NDR) 1210 A Simplified Calculation to Find Case Value 1211 A Simplified Calculation to Find Delayed Payment Case Value Sample: A Personal Injury Case 1220 The Nominal Rates Method v. The Offset Method 1221 Current, Historical, and Forecast Interest Rates 1222 Historical Interest Rate Research 1230 The Mathematics of the Partial Offset 1240 Periodic Payments Required in Medical Malpractice Cases 1250 Runoff Interest Rates Table 39: Runoff Interest Rates 1251 Laddered Interest Rates 1260 Net Discount Rate (NDR) The Mathematics of the Net Discount Rate Table 39A: The NDR Magic Box 1261 Total Offsets in Forensic Economics Table 40: Comparison of Interest Rates Table 41: NDRs for Various Time Periods Table 42: Interest Rates and the Medical Consumer Price Index Table 43: NDRs for Medical Care Costs 1262 The Net Discount Rate Controversy

11 F-15 Table of Contents 1263 Net Discount Rates, Real Rates, and Nominal Rates 1264 Historical Net Discount Rates Table 43A: Net Discount Rates Based on Current Employment Statistics 1270 Worklife and LPE 1271 LPE Factors Table 44: The Probability of Living Table 45: Probability of Participation and Employment Men Table 46: Probability of Participation and Employment Women 1272 Supplemental Calculation of Lost Earnings Using the LPE Method Table 47: Example of Lost Earnings Calculations Using the LPE Method Table 48: Civilian Population, Labor Force and Employment in 000 s All Males With a Bachelor s Degree Historical Table 49: Civilian Population, Labor Force and Employment All Males With a Bachelor s Degree By Age Chapter 13 Putting It All Together 1300 In General 1310 The Preliminaries 1311 Start With the Basics Sex and Race Education Dates of Birth and Injury or Death Life Expectancy Worklife Expectancy Trial Date Occupational Data Household Services Family Status Medical Expenses Discount Rate Income Tax 1320 A Personal Injury Report 1321 Summary of Evaluation Sample: Summary of Evaluation 1322 Basis for Evaluation Sample: Basis for Evaluation 1323 Calculations Printouts: Calculation of Losses 1324 Tax Adjustment Discussion 1330 A Wrongful Death Report 1331 Summary of Losses Sample: Summary of Losses 1332 Basis for Evaluation Sample: Basis for Evaluation Sample: Calculations of Past Losses 1333 Calculations Printout: Calculation of Past Losses Printout: Calculation of Future Losses (Rev. 24, 8/12)

12 Determining Economic Damages F A Wrongful Birth Report 1341 Summary of Losses Sample: Summary of Losses 1342 Basis for Evaluation Sample: Basis for Evaluation 1343 Calculations Sample: Calculation of Losses 1344 Military Retirement Pay and Survivor Benefits Military Retirement Pay Calculations Military Retirement Pay Calculator Sample 1: Retirement Pay Enlisted Sample 2: Retirement Pay Officer Sources of Information for Military Evaluations Reservists May Qualify for Early Retirement Pay 1350 A Final Note on Reports Chapter 14 Tactics and Strategy 1400 Do You Need a Forensic Economist? 1401 Plaintiff 1402 Defendant 1410 Selecting the Right Expert for Your Case 1411 Plaintiff 1412 Defendant 1413 FRCP 26(a)(2)(B) 1414 Rule 26 Testimony List 1420 Instructing the Expert 1421 Plaintiff 1422 Defendant 1423 What You Should Not Tell Your Expert 1430 The Written Report 1431 Plaintiff 1432 Defendant 1433 Written Correspondence 1434 Read Your Expert s Writings 1440 Who Is Deposed First? 1450 Prepare Your Expert for the Deposition 1451 Conducting the Deposition 1460 Preparing Your Expert for Trial 1461 Qualifying Your Expert 1462 General v. Specific Question on Direct 1463 Protecting Your Expert s Testimony 1464 Rehabilitate Your Expert on Redirect 1465 Difficult Issues on Cross-Examination 1470 Some Final Comments 1480 How to Depose and Cross-Examine Plaintiff s Economist 1481 Pretrial Preparation 1482 Guide to Depositions 1483 Guide to Cross-Examination 1484 Conclusion

13 F-17 Table of Contents Chapter 15 Hedonic Damages The Value of Human Life 1500 In General 1510 Perspective of the Chapter 1520 Reports in the Public Media 1521 The New York Times 1522 The Wall Street Journal 1523 Newsweek 1524 Comment on Media Report 1525 Books and Journals 1526 Some Overlooked Studies of Hedonic Damages 1527 Cost Effectiveness of Saving Lives 1530 A Sampling of the Cases Sherrod v. Berry McDougald v. Garber 1531 Other Cases Nussbaum v. Gibstein Leonard v. Parrish Mather v. Griffin Hospital Buoy v. ERA Helicopters, Inc Ayers v. Robinson 1533 The California Position 1540 Additional Commentary on Hedonic Damages 1550 Hedonic Damages and the Banks Case 1560 Loss of Life Enjoyment Economic Report 1570 Proving Hedonic Damages When Expert Testimony Is Not Allowed Chapter 16 Special Unrelated Topics 1600 In General 1610 Probability v. Possibility 1620 Assigned Equitable Indemnity Claims 1630 Vaccine Act Cases 1631 Calculation of Earnings Loss 1632 Value of Life Care Plan 1640 Precedence and Forensic Economics 1650 Work Time Differences 1660 Commercial Computer Programs 1661 Advocate Software Sample: Summary of Losses Sample: Yearly Losses Sample: Medical Costs 1662 Using Calculation Tools Without Foundation 1670 Medical Expenses Billed Amount v. Amount Accepted as Payment in Full 1680 Mary Carter Agreement 1690 Commercial Damages (Rev. 24, 8/12)

14 Chapter 17 Structured Settlements Determining Economic Damages F In General 1701 History of Structured Settlements 1702 The Future of Structured Settlements 1710 Cases Suitable for Structured Settlements 1720 The Various Forms of Structured Settlements 1721 Period Certain 1722 Period Certain With Life Contingency 1723 Increasing Payments 1724 Deferred Lump Sums 1725 Combinations 1726 Options 1730 Examples of Structured Settlement Offers 1731 Female Age Child 1733 Age Rated 1734 Differences in Age Ratings 1740 Tax Advantages 1741 Protecting the Interest of Minors 1742 Blocked Account v. Structured Annuity 1750 Locating and Using a Structured Settlement Annuitist 1751 Who Can Sell Structured Annuities 1752 How the Annuitist/Broker Works With the Economist 1753 Assisting at the Settlement Conference 1754 Know the Financial Strength of the Insurers 1755 Present Value v. Annuity Premium 1756 Structured Attorney Fees 1760 Advantages to the Plaintiff 1770 Advantages to the Defendant 1780 Disclaimer Index