TEA.5.2

Description

Most forensic economists use a faux replacement cost methodology for valuing lost household services that assumes away the critical problems of timing, managing and monitoring replacement workers who will hypothetically replace the services that were lost. This methodology has been accepted by many courts, but has been rejected at the highest appellate level in New York. In Schultz v. Harrison Radiator Division (1997), the highest appellate court in New York set forth a standard that treats lost household services as equivalent to life care costs in a life care plan. In this paper, we compare these two concepts with a “utility lost” specification for the value of lost household services based on welfare economics. We finally point out that the Schultz standard is less likely to result in double counting between household services and intangible elements of damages such as consortium and loss of enjoyment of life damages.