TEA: Volume 5 (2003)

TEA.5.0 – 2003. The Earnings Analyst 5: 124pp.

TEA.5.1 – Employment Law and Mitigation of Damages.  David C. Toppino and Michael R. Hollis.  Mitigation as a vocational concept may be defined as the most probable, optimal or reasonable post-incident offset earnings in a civil employment-law litigation matter. This is generally accomplished via vocational matching, wherein one seeks alternative employment in occupations in which pre-termination skills are highly transferable and job requirements are comparable to the pre-termination position. In this paper the legal foundations are outlined for the key employment-law concepts of: I. Duty to Mitigate; II. Comparable Position; III. Failure to Mitigate; IV. Reinstatement Offers; and V. Burden of Proof. The authors also provide legal citations underlying these concepts.

TEA.5.2 – The Standard for Valuing Lost Household Services: Necessary Life Care Cost, Faux Replacement Cost, or Utility Lost?  Thomas R. Ireland and Anthony H. Riccardi.  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.

TEA.5.3Surviving A Daubert Challenge: A Survey Of Attorneys.  Allyn B. Needham .  After the Daubert and Kumho decisions, economic, vocational rehabilitation and life care planning experts face a greater likelihood of their reports being challenged by opposing counsel. A challenge may lead to an expert’s trial testimony being limited or excluded. To be successful in this new environment, experts need to have insight into the thought processes of the opposing side. To assist in this area, six law firms specializing in defense work agreed to respond to a survey. Ten questions were asked relating to recent challenges, most common reasons for challenges, and what experts could do to limit the risk of being challenged. This report provides a summary of their responses. Although non-scientific, this report is intended to provide a window into the thinking of attorneys as they review an expert’s report.

TEA.5.4Technical Note: Discounting Practices in Forensic — Untangling the Methodological Distinctions.  Kevin S. Marshall.    While the forensic economic literature is replete with scholarly articles exploring and discussing the appropriate discount rate for compensatory damages, it fails to discuss with any specificity the methodological distinctions between 1) discounting for present value and 2) discounting for asset valuation. Moreover, the literature fails to identify other economic constructs necessary for the determination of the appropriate discount rates, whether discounting for present value or asset valuation. While the referenced distinctions seem to be confused by the literature, if not ignored, it is critical that they be nonetheless explored. The identification of such distinctions and constructs is necessary to the analysis and will eliminate the ambiguity, confusion, and even bias, which ultimately leads to a cavalier analytical discounting approach that either under or excessively compensates the Plaintiff.

TEA.5.5Court Decisions of Special Interest to Forensic Economists.  Thomas R. Ireland.    This is a list of legal decisions that are likely to be of special interest to forensic economists or attorneys who are knowledgeable about forensic economics. It has been compiled by forensic economists and does not indicate the precedential value of the cases being cited, nor should the length of the descriptions supplied be interpreted as reflecting the importance of the cases in the field of forensic economics. This list includes at least some cases from most states and will gradually include more material from all states, as well as additional federal cases. The list is a work-in-progress and the list that is being printed in The Earnings Analyst will not include cases added after March 1, 2003. An up to date list can be found on the internet at: