This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognizing you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful. Read our Privacy Policy<\/a>.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":" When an attorney hires a forensic economist for a personal injury or wrongful death case, it\u2019s usually because the case involves lost earnings. A plaintiff\u2019s attorney needs an economist to do a projection of the client\u2019s lost wages, while a defense attorney needs a review of the other side\u2019s projection. I work for both plaintiffs […]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[17],"tags":[],"class_list":["post-99501","post","type-post","status-publish","format-standard","hentry","category-legal_matters"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/posts\/99501","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/comments?post=99501"}],"version-history":[{"count":0,"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/posts\/99501\/revisions"}],"wp:attachment":[{"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/media?parent=99501"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/categories?post=99501"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/tags?post=99501"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
The task for the forensic economist is to determine which chores used to be done by the plaintiff and which ones can no longer be done. Once the categories of chores are known, the economist can ask the plaintiff how much time was spent on them or use published data to get an average amount of time. The reduction in the number of hours per week spent on such tasks is the lost service time.<\/p>\n
Some people can say precisely which tasks they can no longer do. Others provide a percentage loss, say 75%. Obviously, in a wrongful-death case, the loss is 100%.<\/p>\n
To translate the lost time into a dollar value, the economist multiplies the lost hours by an hourly wage. Some data sources combine the two steps and report the dollar value directly. But the result is the same: the value of lost services for each year in the analysis. As in a lost-earnings projection, the economist calculates the present value of those annual values.<\/p>\n
Implicit Rules<\/strong><\/h2>\nI\u2019ve seen some economists get quite aggressive in claiming service time. One claimed eight hours of sleep time each night, arguing that an overnight security guard would be needed. Another claimed time spent watching TV with the kids. North Carolina law is not explicit about the acceptable categories for lost services, but the implicit rule points to services for which a person would reasonably hire assistance.<\/p>\n
Another implicit rule involves what could be called good-faith mitigation. If the injured person\u2019s cousin has been coming over to mow the lawn, that doesn\u2019t mean that lawn care can\u2019t be included as a lost service. As attorneys have explained it to me over the years, the cousin\u2019s work still has value, even if no wages are paid. And who knows how long that arrangement will last?<\/p>\n
Analytical Pitfalls<\/strong><\/h2>\nLife-care plans (projections of future medical costs) often include a personal care aide to take care of cooking and cleaning in the injured person\u2019s home. If the economist does a separate projection of lost services, care must be taken not to double-count the household chores in the LCP.<\/p>\n
Finally, when placing a value on household services, should the economist assume that the service worker is hired directly or is employed by a company such as a maid service? Some economists build in mark-ups as high as 50% to capture the latter possibility, but we don\u2019t really know how that future service will be provided. In my work, I use a mark-up of 7.65% for FICA, on the assumption that it\u2019ll be part of the cost of the service whether the worker is independent or an employee.<\/p>\n
It\u2019s important to remember that economic damages often go beyond lost earnings, and the forensic economist should be open to such possibilities.<\/p>\n
The post Lost Household Services in Lost Wages Projections<\/a> appeared first on Attorney at Law Magazine<\/a>.<\/p>\n\n\n\n![\"\"](\"https:\/\/i0.wp.com\/attorneyatlawmagazine.com\/wp-content\/uploads\/2020\/09\/black%400.5x.png?resize=172%2C63&ssl=1\" "\\"\\"")
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Life-care plans (projections of future medical costs) often include a personal care aide to take care of cooking and cleaning in the injured person\u2019s home. If the economist does a separate projection of lost services, care must be taken not to double-count the household chores in the LCP.<\/p>\n
Finally, when placing a value on household services, should the economist assume that the service worker is hired directly or is employed by a company such as a maid service? Some economists build in mark-ups as high as 50% to capture the latter possibility, but we don\u2019t really know how that future service will be provided. In my work, I use a mark-up of 7.65% for FICA, on the assumption that it\u2019ll be part of the cost of the service whether the worker is independent or an employee.<\/p>\n
It\u2019s important to remember that economic damages often go beyond lost earnings, and the forensic economist should be open to such possibilities.<\/p>\n
The post Lost Household Services in Lost Wages Projections<\/a> appeared first on Attorney at Law Magazine<\/a>.<\/p>\n<\/div>\n<\/div>\n