TEA.4.4

Description

Most forensic economists calculate the present value of damages as of the expected date of trial. In general, past damages are presented without adjustment for interest, while future damages are reduced to present value by discounting for future interest from the date of the trial. In wrongful termination cases, this is mandated in the form of “back pay” and “front pay” calculations, but it is not mandated in cases involving personal injury and wrongful death. While it is not technically controlling for cases other than FELA and Jones Act personal injuries, Jones & Laughlin Steel Corp. v. Pfeifer (1983) is the de facto ruling case on methods to be used in federal personal injury cases. Footnote 22 of the Pfeifer decision lays out a different, but very specific method to be followed when calculating the present value of damages in personal injury actions. This paper discusses the implications of that method, both in terms of accuracy and in terms of the legal resolution of issues of controversy among forensic economists.