Direct Examination of Forensic Economist
PROVING DAMAGES AT TRIAL ~
DIRECT E XAMINATION OF A F ORENSIC E CONOMIST MATERIALS BY Dr. Frank Tinari
Seminar on Proving Damages at Trial NYS Acade m y of Trial Lawye rs Spring 2009
Direct Examination of Forensic Economist: Guidelines and Case Study of Injured Woman Frank D. T inari, Ph.D. T inari Economics Group www.TinariEconom ics.com
1. Preparing for trial with your damages expert 1.1. Direct examination styles and preferences 1.2. Q&A review 1.3. T he expert should be informed about the makeup of the jury 1.4. Need to direct the testimony, even when expert is narrating the damages story 1.5. Sim plicity, clarity, and logical order take precedence 2. T rial strategy: 2.1. Qualify your expert, even if other side stipulates to qualifications 2.2. Some elements of damages may be sacrificed, in light of facts brought out at trial, or other trial developments. For example, may want to delete calculation of household services. 3. Changes in testimony 3.1. Damages expert typically appears towards end of plaintiff’s case. 3.2. Last minute changes may have to be made. 3.3. Difficult to make on the fly. Prepare your expert. 4. Demonstrative evidence 4.1. T hose who write narrative reports or who do spreadsheet-based reports with extensive footnotes may believe that their report explains their assumptions and methods; but in most jurisdictions, the written report is not submitted as evidence. 4.2. It is the expert’s oral testimony that becomes the basis for the expert’s findings as presented to the jury. 4.3. T he expert’s job is to clearly and concisely communicate the essence of his or her findings and opinion, minimizing technical terms and jargon. Sim plicity, clarity, and logical order take precedence. 4.4. Pros and cons of laptop use in courtroom.
Copyright © Dr. Frank Tinari 2009. All rights reserved.
33
2
5. Use of Demonstrative Charts vs. Spreadsheets in Reports 5.1. Clarity vs. completeness 5.2. Streamlined & simplified terminology (e.g., statistical worklife expectancy v. worklife; percent v. decimals; font size) 5.3. Logical sequencing (build-up method v. starting with total) 5.4. Blown-up charts on boards or projected charts? If projector, have several hard copies available. 5.5. Sim plicity, clarity, and logical order take precedence 6. Case Study of Injured Woman [Video projection of attached charts] 7. Additional reading: see excerpt from Determ ining Econom ic Dam ages by G. Martin
Copyright © Dr. Frank Tinari 2009. All rights reserved.
34
3
Donna Smith born: impaired: age at impairment: education: life expectancy: statistical retirement age: projected retirement date: worklife: health: expected employer: expected position: post-injury employer: post-injury position: spouse:
July 19, 1966 December 9, 1998 32.39 years high school 81.89 (June 8, 2048) 61.46 (January 3, 2028) July 19, 2028 (28 yrs of service) 77.3% functioned normally Middle County Police Department (MCPD) clerk typist Bob Grant School District (BGSD) clerk typist Michael
Components of Analysis 1. net earnings in past years 2. net earnings in future years 3. net pension income 4. household services
Copyright © Dr. Frank Tinari 2009. All rights reserved.
35
4
Earnings History W -2 Earnings Year
MC PD
BGSD
(1)
(2)
(3)
2000
$23,829*
2001
$ 7,719
2002
20,500
2003
23,162
2004
23,418
2005
12,551
* starting salary on assumed date of hire: 7/1/2000
MCPD Base Earnings $23,829 year 2000 starting salary
Projected Annual Wage Increase
Past Years: 3.0% Future Years: 3.9%
Copyright © Dr. Frank Tinari 2009. All rights reserved.
36
5
Earnings Adjustments MCPD 100% 77.3% 4% 5% 70.5%
Gross Earnings Base x W orklife Adjustment - 4%, 0% unemployment - 5% job maintenance expenses = Adjusted Earnings Factor
BGFD 100% 77.3% 0% 5% 73.44%
Net Earnings Loss Past Years
Year
Portion of Year
Estimated MC PD Gross Earnings [@ 3%]
(1)
(2)
(3)
2000
50%
$ 11,915
$8,400
2001
100%
24,758
17,454
7,719
5,669
11,786
2002
100%
25,501
17,978
20,500
15,055
2,923
2003
100%
26,266
18,517
23,162
17,010
1,507
2004
100%
27,054
19,073
23,418
17,198
1,875
2005
100%
27,865
19,645
12,551
9,217
10,428
2006
100%
28,701
20,234
20,234
2007
100%
29,562
20,841
20,841
2008
25%
7,612
5,367
5,367
A djusted Earnings [70.50%]
A ctual BGSD Gross Earnings
A djusted Earnings [73.44%]
Net Loss [(4)-(6)]
(4)
(5)
(6)
(7) $ 8,400
total:
Copyright © Dr. Frank Tinari 2009. All rights reserved.
37
$83,361
6
Net Earnings Loss Future Years
Y ear
P ortion of Year
E stimated MC PD G ross E arnings [@ 3.9% ]
(1)
(2)
(3)
A djusted E arnings [70.50% ] (4)
2008
75%
$ 22,837
$ 16,100
2009
100%
31,637
22,304
2010
100%
32,871
23,174
2011
100%
34,153
24,078
2012
100%
35,485
25,017
2013
100%
36,869
25,992
2014
100%
38,307
27,006
2015
100%
39,801
28,059
2016
100%
41,353
29,154
2017
100%
42,965
30,291
2018
100%
44,641
31,472
2019
100%
46,382
32,699
2020
100%
48,191
33,975
2021
100%
50,070
35,300
2022
100%
52,023
36,676
2023
100%
54,052
38,107
2024
100%
56,160
39,593
2025
100%
58,350
41,137
2026
100%
60,626
42,741
2027
100%
62,991
44,408
2028
42%
21,030
14,826
T otal
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38
$ 6 4 2 ,1 0 6
7
Pension Calculation Assumptions assumed date of retirement: statistical date of death: years of service at retirement: employee contribution: cost-of-living adjustment:
July 19, 2028 June 8, 2048 28 3% of salary none
Pension Formula 2% x FAS x Years of Service
Final Average Salary (FAS) Y ear
Earnings
2025
$58,351
2026
60,626
2027
62,991
2028 (42%)
21,030
Total: $178,490.37 3-Year Average: $59,496
Projected Pension Benefit 2% x $59,496 x 28 years = $33,318
Copyright © Dr. Frank Tinari 2009. All rights reserved.
39
8
Projected Annual Employee Contributions (required for first 10 years of service)
A nnual C ontributions
Year 2000 (50%)
$357
2001
743
2002
765
2003
788
2004
812
2005
836
2006
861
2007
887
2008
921
2009
957
2010
497
total:
$ 8,424
Copyright © Dr. Frank Tinari 2009. All rights reserved.
40
9
Net Pension Income Year
A nnual Pension
2028 (42%)
$ 13,994
2029
33,318
2030
33,318
2031
33,318
2032
33,318
2033
33,318
2034
33,318
2035
33,318
2036
33,318
2037
33,318
2038
33,318
2039
33,318
2040
33,318
2041
33,318
2042
33,318
2043
33,318
2044
33,318
2045
33,318
2046
33,318
2047
33,318
2048 (42%)
13,994
sub-total:
$ 661,033
employ ee contributions
(8,425)
total:
Copyright © Dr. Frank Tinari 2009. All rights reserved.
$ 652,608
41
10
Household Services
Annual Service Hours 1,144 per year (22 hours per week) Amount of services changes with household profile
Annual Wage Increase Past Years: 3.0% Future Years: 3.9%
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42
11
Household Services Valuation Past Years
Year
Annual Hours
Hourly Rate [@ 3%]
Annual Value [(2) x (3)]
(1)
(2)
(3)
(4)
2000 (50%)
572
$ 9.66
$ 5,526
2001
1,144
9.95
11,383
2002
1,144
10.25
11,724
2003
1,144
10.56
12,076
2004
1,144
10.87
12,438
2005
1,144
11.20
12,811
2006
1,144
11.53
13,196
2007
1,144
11.88
13,591
286
12.24
3,500
2008 (25%)
total:
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43
$ 96,238
12
Household Services Valuation Future Years
Year 2008 (75%)
Annual Hours
Annual Value [@ 3.9%]
858
$10,502
2009
1,144
14,549
2010
1,144
15,116
2011
1,144
15,706
2012
1,144
16,318
2013
1,144
16,955
2014
988
15,214
2015
988
15,807
2016
988
16,423
2017
988
17,064
2018
988
17,729
2019
988
18,421
2020
988
19,139
2021
988
19,886
2022
988
20,661
2023
988
21,467
2024
988
22,304
2025
988
23,174
2026
988
24,078
2027
988
25,017
2028
988
25,993
2029
988
27,006
2030
988
28,060
2031
988
29,154
2032
879
26,959
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44
13 Annual Value [@ 3.9%]
Year
Annual Hours
2033
879
28,000
2034
879
29,092
2035
879
30,227
2036
879
31,405
2037
879
32,630
2038
879
33,903
2039
879
35,225
2040
879
36,599
2041
879
38,026
2042
682
30,655
2043
682
31,850
2044
682
33,092
2045
682
34,383
2046
682
35,724
2047
682
37,117
2048 (42%)
286
16,190
total:
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45
$ 1,016,819
14
Household Services Loss Value of Household Serv ices
A ssumed Range of Loss 20%
30%
40%
Past Years [$96,238]
$19,248
$28,871
$38,495
Future Years [$1,016,730]
203,346
305,109
406,692
T otal Loss
$223,294
Copyright © Dr. Frank Tinari 2009. All rights reserved.
$335,030
46
$446,587
15
Summary Range of Value of Loss 20%*
30%*
40%*
Components of Loss
$83,361
$83,361
$83,361
net earnings in past years
642,106
642,106
642,106
net earnings in future years
652,608
652,608
652,608
net pension income
19,248
28,871
38,495
203,346
305,109
406,692
$ 1,600,669 $ 1,712,055 $
1,823,262
Copyright © Dr. Frank Tinari 2009. All rights reserved.
47
*household services - past years *household services-future years total value of loss
16
Excerpts from:
Determining Economic Damages
Gerald D. Martin, Ph.D.
P roduction editing by Kristine McDowell and Amanda Winkler Edited by Kristine McDowell
Contact us at (800) 440-4780 or www.jamespublishing.com
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48
17 Related Tex ts Slip and Fall Practice, T urnbow Litigating Neck & Back Injuries, T arantino Model Interrogatories, Culhane Personal Injury Forms: Discovery & Settlement, T arantino Copyright © 1988 – 2008 James Publishing, Inc. ISBN 0-938065-41-6 T his publication is intend ed t o p ro vide accurate and authoritative information about the subject matter co v ered . It is sold with the understanding that the publisher does not render legal, accounting, or o t h er p ro fessional services. If legal advice or other expert assistance is required, seek the services of a competent professional. Persons using this publication in dealing with specific legal matters should ex erci s e t h eir own independent judgment and research original sources of authority and local court rules. T he pu b l i s h er an d the author make no representations concerning the contents of this publication and disclaim any warranties of merchantability or fitness for a particular purpose. We view the publication of this work as t h e b eg inning of a dialogue with our readers. Periodic rev i s i o n s to it will give us the opportunity to incorporate your suggested changes. Call us at (714) 7 5 5 5450 or send your comments to: Revision Editor James Publishing 3505 Cadillac Ave., Suite H Costa Mesa, CA 92626 First edition, 12/88 Revision 1, 11/89 Revision 2, 10/90 Revision 3, 10/91 Revision 4, 9/92 Revision 5, 10/93 Revision 6, 12/94 Revision 7, 10/95 Revision 8, 9/96 Revision 9, 7/97 Revision 10, 9/98 Revision 11, 9/99 Revision 12, 9/00 Revision 13, 6/01 Revision 14, 6/02 Revision 15, 5/03 Revision 16, 7/04 Revision 17, 7/05 Revision 18, 6/06 Revision 19, 6/07 Revision 20, 7/08
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49
18 Chapter 14, Selected Sections §1461 Qualifying Your Expert Always go through your expert’s qualifications. Quite often, opposing counsel will offer to stipulate to the expert’s qualifications. T here may be several reasons for this stipulation. One, his expert may be less qualified. T wo, he may not be using an expert. T hree, he may not want to let the jury know just how well qualified your expert is. So, even if a stipulation is offered, go right ahead with the qualifications and let the jury know that he has the training and experience to offer the opinions that will follow. §1462 General v. Specific Question on Direct Your approach to asking questions on direct depends both on your experience working with economists and the economist’s experience in the courtroom. If you have seldom, if ever, used an economist, and he is experienced, it may be better to just ask broad, general questions and let the expert carry the ball. Listen carefully, and ask clarifying questions if he says something you do not understand because it is possible some jurors also do not understand. T he expert can give you a short list of topics to guide your questions, and you can finish by asking if he has now covered all of the estimates he has made and described all of his sources. If you are the more experienced, you may wish to ask more questions, each more detailed than in the general approach. In this way, you can guide the examination at the pace and depth you think is best to get the information across to the jurors. Consider using large charts or tables to illustrate points covered in the direct examination, or have the expert go to a posterboard and write out certain information. If you plan to do this, tell your expert in advance so he will be prepared. It can be very embarrassing to ask an expert to draw a chart without giving him the opportunity to prepare. §1463 Protecting Your Expert’s T estimony On cross-examination, experts have become accustomed to a series of questions implying that their entire testimony is based on a long list of assumptions. T his is true. T he assumptions are based on logic, common sense, and the information available. Often this is hearsay, but, unlike the lay witness, experts are permitted to use hearsay. Make sure the jury knows this if it becomes an issue. You can, however, minimize the assumptions with the proper use of witnesses who testify before the economist. For example, when family members testify, go into the subject of the services performed around the home and for the family. Have your doctors, nurses, and rehabilitation experts provide the data the economist is relying on. If possible, introduce birth certificates, death certificates, and employment records. If a former employer testifies, ask him about the policy for granting raises and promotions, and the stability and security of the job held by the plaintiff. In short, eliminate as many assumptions as possible by offering factual information.
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50
19 §1464 Rehabilitate Your Expert on Redirect Although you can tell your expert what he will be asked on direct, he is on his own during cross-examination. At times, you can protect him with objections, but not always. If you know your opponent has cast some doubt on your expert’s testimony, it is up to you to ask the questions that will allow the expert to clarify everything. If possible, try to get a recess right after cross-examination is complete. You may find that the expert knows exactly what you should ask him to counter what has occurred. If you can’t get a recess, then go back to the topics where your expert was not allowed to give an explanation, even though he tried, and ask if he would now care to elaborate on what may have been restricted to a yes or no answer on cross examination. With carefully worded questions, you can give your expert some rather general openings to offer a more complete answer to any hypothetical questions asked on cross-examination.
§1465 Difficult Issues on Cross-Examination • Assumptions: Many attorneys will ask about an the assumptions made in reaching an opinion of losses. He will ask whether the economist has verified everything possible, including such obvious things as date of birth of the plaintiff. It is extremely rare that an economist will examine the birth certificate of the plaintiff, and it is not necessary that he do so. Nevertheless, the opposing attorney will build up an impressive list of assumptions made and ask whether the appraisal is accurate if any of the assumptions are incorrect. Yom economist should never argue over assumptions. Of course, he made many, and should freely tell the jury. T he purpose of this type of examination is to make an assumption appear to be nothing more than a guess, thereby weakening the effect of the calculations made. It is not a series of questions that should lead to an argument, and certainly your economist must avoid going on the defensive as it makes him appear to be an advocate. One of the spontaneous responses I have heard an economist give, after being grilled endlessly on assumptions, was to look at the jury and tell them that not once in his life had he seen a baby squirrel, but he assumed they must exist. • Wrong field of expertise: Economists should be alert for questions that could be better answered by an expert in another specialty. For example, the economist should never give opinions regarding shortened life expectancy, vocational rehabilitation possibilities, the need for any medical procedure, an opinion as to who was at fault, or a legal opinion regarding collateral sources. If your case has been prepared properly, an of these things will have been testified to by prior experts and the economist should state that he is relying on their professional opinions, not his own. • 100% certain: Increasingly, attorneys are using guides written for cross examination, and one recent guide recommends asking, at the end of the deposition or trial, whether the economist is 100% certain that his estimate of the loss is correct. Of course, he is not and should never say that he is. He should tell the jury that, no, he is not 100% certain about the future, but based on prior testimony and information provided to him, the estimate is the most likely or most
Copyright © Dr. Frank Tinari 2009. All rights reserved.
51
20 probable estimate at that time testifying under oath to tell the truth, and that he is offering them the very best estimate he believes can be make. • Unlimited resources: Another closing question being asked on cross-exam goes like this: “ Dr., if you were given unlimited resources and funds, is there anything you would do in researching your opinion of the loss that you have not done in this case?” T his should be easy, but some economists have tripped up over it. In several thousand cases, I have never had a retaining attorney tell me up front the maximum number of hours I could put in on the job, or the maximum amount of time that I could bill. Consequently, I have always operated under the belief that I have unlimited resources and funds in all cases. Just have you economist tell the jury he had no restrictions placed on him either resources or funds. • First year interest: In many evaluations, the total loss will, when invested, generate more in interest earnings in the first year than will be needed to pay the loss in that year. T he typical questions here is to have the economist tell the jury what is lost in the first year and how much will be earned in interest in the first year. Sometimes, the attorney will continue by asking if the same amount is earned each year and that the amount is taken by the plaintiff, isn’t it true that he will still have the original award at the end of his worklife. Certainly, that is true, and the questions usually stop there. On redirect, just ask your economist what is wrong with that assumption, and he will easily explain that, because earnings increase each year, but interest earnings, don’t, eventually there will not be enough earned in interest to pay the loss in future years, and at that time the award itself, will begin to be depleted, reaching a zero value at the end of worklife. (T his is also known as the unanswered question. Defense at torney will not ask this to the economist, but will wait until he has gone and appear to think of it for the first time in closing argument. He may tell the jury, “ isn’t it too bad the economist is not here to answer that question.” Now this becomes your problem because the economist cannot be recalled. either head it off by covering in on direct, or remind the jury that the economist was present and ready to anwser any questions posed on cross-examination). • T he average person: Many times, the economist will have to rely on studies and government statistics to calculate a loss. For instance, it is common to rely on life expectancy and worklife expectancy tables, average household service value studies, personal consumption studies, and other items that pertain to large groups rather than the individual plaintiff. T his may be the focus of cross-exam questions, and in most cases, the best answer your economist can give is to say he assumed the plantiff was neither better nor worse than the average.
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52
21
Frank D. Tinari, Ph.D. Brief Biography
Frank D. Tinari, Ph.D., is Professor Emeritus of Economics at Seton Hall University and President of the Tinari Economics Group, a consulting practice he founded in 1979, with offices in New Jersey and New York City. He also has taught at Fordham, Pace, Purdue, William Paterson and Drew Universities, and was an invited repeat lecturer at the University of International Business and Economics in Beijing. Tinari holds an earned doctorate, as well as a B.S. (‘64) and M .A. (‘66) from Fordham University . Dr. Tinari is a past President of the National Association of Forensic Economics (NAFE), and is a member of the American, Western and Eastern Economic Associations, and the American Academy of Economic and Financial Exp erts. He also served a 4-year term as the elected M ayor of Florham Park, New Jersey, during which time he was instrumental in recruiting the NY Jets to move its national headquarters and state-of-the-art training facility to Florham Park. Frank has lectured widely for professional organizations including NELA, the Inns of Court, NJ ICLE, Seton Hall University Law School, the New York State Trial Lawyers Institute, ATLA-NJ, the New Jersey State Bar Association, and the International Association of Defense Counsel. From 2002 through 2004, he worked closely with Trial Lawy ers Care to assist claimants of the 911 Victims Compensation Fund, and testified at dozens of hearings before Special M aster Ken Feinberg. The author of a college textbook, Frank is widely published in numerous journals and publications. He serves as editorial reviewer for the Journal of Economic Education, Journal of Legal Economics, and the Journal of Forensic Economics. He has p rovided expert testimony at over 700 trials, arbitration hearings and oral dep ositions. Frank may be reached at 973.992.1800 or by email at [email protected]
Copyright © Dr. Frank Tinari 2009. All rights reserved.
53
DIRECT E XAMINATION OF A F ORENSIC E CONOMIST MATERIALS BY Dr. Frank Tinari
Seminar on Proving Damages at Trial NYS Acade m y of Trial Lawye rs Spring 2009
Direct Examination of Forensic Economist: Guidelines and Case Study of Injured Woman Frank D. T inari, Ph.D. T inari Economics Group www.TinariEconom ics.com
1. Preparing for trial with your damages expert 1.1. Direct examination styles and preferences 1.2. Q&A review 1.3. T he expert should be informed about the makeup of the jury 1.4. Need to direct the testimony, even when expert is narrating the damages story 1.5. Sim plicity, clarity, and logical order take precedence 2. T rial strategy: 2.1. Qualify your expert, even if other side stipulates to qualifications 2.2. Some elements of damages may be sacrificed, in light of facts brought out at trial, or other trial developments. For example, may want to delete calculation of household services. 3. Changes in testimony 3.1. Damages expert typically appears towards end of plaintiff’s case. 3.2. Last minute changes may have to be made. 3.3. Difficult to make on the fly. Prepare your expert. 4. Demonstrative evidence 4.1. T hose who write narrative reports or who do spreadsheet-based reports with extensive footnotes may believe that their report explains their assumptions and methods; but in most jurisdictions, the written report is not submitted as evidence. 4.2. It is the expert’s oral testimony that becomes the basis for the expert’s findings as presented to the jury. 4.3. T he expert’s job is to clearly and concisely communicate the essence of his or her findings and opinion, minimizing technical terms and jargon. Sim plicity, clarity, and logical order take precedence. 4.4. Pros and cons of laptop use in courtroom.
Copyright © Dr. Frank Tinari 2009. All rights reserved.
33
2
5. Use of Demonstrative Charts vs. Spreadsheets in Reports 5.1. Clarity vs. completeness 5.2. Streamlined & simplified terminology (e.g., statistical worklife expectancy v. worklife; percent v. decimals; font size) 5.3. Logical sequencing (build-up method v. starting with total) 5.4. Blown-up charts on boards or projected charts? If projector, have several hard copies available. 5.5. Sim plicity, clarity, and logical order take precedence 6. Case Study of Injured Woman [Video projection of attached charts] 7. Additional reading: see excerpt from Determ ining Econom ic Dam ages by G. Martin
Copyright © Dr. Frank Tinari 2009. All rights reserved.
34
3
Donna Smith born: impaired: age at impairment: education: life expectancy: statistical retirement age: projected retirement date: worklife: health: expected employer: expected position: post-injury employer: post-injury position: spouse:
July 19, 1966 December 9, 1998 32.39 years high school 81.89 (June 8, 2048) 61.46 (January 3, 2028) July 19, 2028 (28 yrs of service) 77.3% functioned normally Middle County Police Department (MCPD) clerk typist Bob Grant School District (BGSD) clerk typist Michael
Components of Analysis 1. net earnings in past years 2. net earnings in future years 3. net pension income 4. household services
Copyright © Dr. Frank Tinari 2009. All rights reserved.
35
4
Earnings History W -2 Earnings Year
MC PD
BGSD
(1)
(2)
(3)
2000
$23,829*
2001
$ 7,719
2002
20,500
2003
23,162
2004
23,418
2005
12,551
* starting salary on assumed date of hire: 7/1/2000
MCPD Base Earnings $23,829 year 2000 starting salary
Projected Annual Wage Increase
Past Years: 3.0% Future Years: 3.9%
Copyright © Dr. Frank Tinari 2009. All rights reserved.
36
5
Earnings Adjustments MCPD 100% 77.3% 4% 5% 70.5%
Gross Earnings Base x W orklife Adjustment - 4%, 0% unemployment - 5% job maintenance expenses = Adjusted Earnings Factor
BGFD 100% 77.3% 0% 5% 73.44%
Net Earnings Loss Past Years
Year
Portion of Year
Estimated MC PD Gross Earnings [@ 3%]
(1)
(2)
(3)
2000
50%
$ 11,915
$8,400
2001
100%
24,758
17,454
7,719
5,669
11,786
2002
100%
25,501
17,978
20,500
15,055
2,923
2003
100%
26,266
18,517
23,162
17,010
1,507
2004
100%
27,054
19,073
23,418
17,198
1,875
2005
100%
27,865
19,645
12,551
9,217
10,428
2006
100%
28,701
20,234
20,234
2007
100%
29,562
20,841
20,841
2008
25%
7,612
5,367
5,367
A djusted Earnings [70.50%]
A ctual BGSD Gross Earnings
A djusted Earnings [73.44%]
Net Loss [(4)-(6)]
(4)
(5)
(6)
(7) $ 8,400
total:
Copyright © Dr. Frank Tinari 2009. All rights reserved.
37
$83,361
6
Net Earnings Loss Future Years
Y ear
P ortion of Year
E stimated MC PD G ross E arnings [@ 3.9% ]
(1)
(2)
(3)
A djusted E arnings [70.50% ] (4)
2008
75%
$ 22,837
$ 16,100
2009
100%
31,637
22,304
2010
100%
32,871
23,174
2011
100%
34,153
24,078
2012
100%
35,485
25,017
2013
100%
36,869
25,992
2014
100%
38,307
27,006
2015
100%
39,801
28,059
2016
100%
41,353
29,154
2017
100%
42,965
30,291
2018
100%
44,641
31,472
2019
100%
46,382
32,699
2020
100%
48,191
33,975
2021
100%
50,070
35,300
2022
100%
52,023
36,676
2023
100%
54,052
38,107
2024
100%
56,160
39,593
2025
100%
58,350
41,137
2026
100%
60,626
42,741
2027
100%
62,991
44,408
2028
42%
21,030
14,826
T otal
Copyright © Dr. Frank Tinari 2009. All rights reserved.
38
$ 6 4 2 ,1 0 6
7
Pension Calculation Assumptions assumed date of retirement: statistical date of death: years of service at retirement: employee contribution: cost-of-living adjustment:
July 19, 2028 June 8, 2048 28 3% of salary none
Pension Formula 2% x FAS x Years of Service
Final Average Salary (FAS) Y ear
Earnings
2025
$58,351
2026
60,626
2027
62,991
2028 (42%)
21,030
Total: $178,490.37 3-Year Average: $59,496
Projected Pension Benefit 2% x $59,496 x 28 years = $33,318
Copyright © Dr. Frank Tinari 2009. All rights reserved.
39
8
Projected Annual Employee Contributions (required for first 10 years of service)
A nnual C ontributions
Year 2000 (50%)
$357
2001
743
2002
765
2003
788
2004
812
2005
836
2006
861
2007
887
2008
921
2009
957
2010
497
total:
$ 8,424
Copyright © Dr. Frank Tinari 2009. All rights reserved.
40
9
Net Pension Income Year
A nnual Pension
2028 (42%)
$ 13,994
2029
33,318
2030
33,318
2031
33,318
2032
33,318
2033
33,318
2034
33,318
2035
33,318
2036
33,318
2037
33,318
2038
33,318
2039
33,318
2040
33,318
2041
33,318
2042
33,318
2043
33,318
2044
33,318
2045
33,318
2046
33,318
2047
33,318
2048 (42%)
13,994
sub-total:
$ 661,033
employ ee contributions
(8,425)
total:
Copyright © Dr. Frank Tinari 2009. All rights reserved.
$ 652,608
41
10
Household Services
Annual Service Hours 1,144 per year (22 hours per week) Amount of services changes with household profile
Annual Wage Increase Past Years: 3.0% Future Years: 3.9%
Copyright © Dr. Frank Tinari 2009. All rights reserved.
42
11
Household Services Valuation Past Years
Year
Annual Hours
Hourly Rate [@ 3%]
Annual Value [(2) x (3)]
(1)
(2)
(3)
(4)
2000 (50%)
572
$ 9.66
$ 5,526
2001
1,144
9.95
11,383
2002
1,144
10.25
11,724
2003
1,144
10.56
12,076
2004
1,144
10.87
12,438
2005
1,144
11.20
12,811
2006
1,144
11.53
13,196
2007
1,144
11.88
13,591
286
12.24
3,500
2008 (25%)
total:
Copyright © Dr. Frank Tinari 2009. All rights reserved.
43
$ 96,238
12
Household Services Valuation Future Years
Year 2008 (75%)
Annual Hours
Annual Value [@ 3.9%]
858
$10,502
2009
1,144
14,549
2010
1,144
15,116
2011
1,144
15,706
2012
1,144
16,318
2013
1,144
16,955
2014
988
15,214
2015
988
15,807
2016
988
16,423
2017
988
17,064
2018
988
17,729
2019
988
18,421
2020
988
19,139
2021
988
19,886
2022
988
20,661
2023
988
21,467
2024
988
22,304
2025
988
23,174
2026
988
24,078
2027
988
25,017
2028
988
25,993
2029
988
27,006
2030
988
28,060
2031
988
29,154
2032
879
26,959
Copyright © Dr. Frank Tinari 2009. All rights reserved.
44
13 Annual Value [@ 3.9%]
Year
Annual Hours
2033
879
28,000
2034
879
29,092
2035
879
30,227
2036
879
31,405
2037
879
32,630
2038
879
33,903
2039
879
35,225
2040
879
36,599
2041
879
38,026
2042
682
30,655
2043
682
31,850
2044
682
33,092
2045
682
34,383
2046
682
35,724
2047
682
37,117
2048 (42%)
286
16,190
total:
Copyright © Dr. Frank Tinari 2009. All rights reserved.
45
$ 1,016,819
14
Household Services Loss Value of Household Serv ices
A ssumed Range of Loss 20%
30%
40%
Past Years [$96,238]
$19,248
$28,871
$38,495
Future Years [$1,016,730]
203,346
305,109
406,692
T otal Loss
$223,294
Copyright © Dr. Frank Tinari 2009. All rights reserved.
$335,030
46
$446,587
15
Summary Range of Value of Loss 20%*
30%*
40%*
Components of Loss
$83,361
$83,361
$83,361
net earnings in past years
642,106
642,106
642,106
net earnings in future years
652,608
652,608
652,608
net pension income
19,248
28,871
38,495
203,346
305,109
406,692
$ 1,600,669 $ 1,712,055 $
1,823,262
Copyright © Dr. Frank Tinari 2009. All rights reserved.
47
*household services - past years *household services-future years total value of loss
16
Excerpts from:
Determining Economic Damages
Gerald D. Martin, Ph.D.
P roduction editing by Kristine McDowell and Amanda Winkler Edited by Kristine McDowell
Contact us at (800) 440-4780 or www.jamespublishing.com
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48
17 Related Tex ts Slip and Fall Practice, T urnbow Litigating Neck & Back Injuries, T arantino Model Interrogatories, Culhane Personal Injury Forms: Discovery & Settlement, T arantino Copyright © 1988 – 2008 James Publishing, Inc. ISBN 0-938065-41-6 T his publication is intend ed t o p ro vide accurate and authoritative information about the subject matter co v ered . It is sold with the understanding that the publisher does not render legal, accounting, or o t h er p ro fessional services. If legal advice or other expert assistance is required, seek the services of a competent professional. Persons using this publication in dealing with specific legal matters should ex erci s e t h eir own independent judgment and research original sources of authority and local court rules. T he pu b l i s h er an d the author make no representations concerning the contents of this publication and disclaim any warranties of merchantability or fitness for a particular purpose. We view the publication of this work as t h e b eg inning of a dialogue with our readers. Periodic rev i s i o n s to it will give us the opportunity to incorporate your suggested changes. Call us at (714) 7 5 5 5450 or send your comments to: Revision Editor James Publishing 3505 Cadillac Ave., Suite H Costa Mesa, CA 92626 First edition, 12/88 Revision 1, 11/89 Revision 2, 10/90 Revision 3, 10/91 Revision 4, 9/92 Revision 5, 10/93 Revision 6, 12/94 Revision 7, 10/95 Revision 8, 9/96 Revision 9, 7/97 Revision 10, 9/98 Revision 11, 9/99 Revision 12, 9/00 Revision 13, 6/01 Revision 14, 6/02 Revision 15, 5/03 Revision 16, 7/04 Revision 17, 7/05 Revision 18, 6/06 Revision 19, 6/07 Revision 20, 7/08
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49
18 Chapter 14, Selected Sections §1461 Qualifying Your Expert Always go through your expert’s qualifications. Quite often, opposing counsel will offer to stipulate to the expert’s qualifications. T here may be several reasons for this stipulation. One, his expert may be less qualified. T wo, he may not be using an expert. T hree, he may not want to let the jury know just how well qualified your expert is. So, even if a stipulation is offered, go right ahead with the qualifications and let the jury know that he has the training and experience to offer the opinions that will follow. §1462 General v. Specific Question on Direct Your approach to asking questions on direct depends both on your experience working with economists and the economist’s experience in the courtroom. If you have seldom, if ever, used an economist, and he is experienced, it may be better to just ask broad, general questions and let the expert carry the ball. Listen carefully, and ask clarifying questions if he says something you do not understand because it is possible some jurors also do not understand. T he expert can give you a short list of topics to guide your questions, and you can finish by asking if he has now covered all of the estimates he has made and described all of his sources. If you are the more experienced, you may wish to ask more questions, each more detailed than in the general approach. In this way, you can guide the examination at the pace and depth you think is best to get the information across to the jurors. Consider using large charts or tables to illustrate points covered in the direct examination, or have the expert go to a posterboard and write out certain information. If you plan to do this, tell your expert in advance so he will be prepared. It can be very embarrassing to ask an expert to draw a chart without giving him the opportunity to prepare. §1463 Protecting Your Expert’s T estimony On cross-examination, experts have become accustomed to a series of questions implying that their entire testimony is based on a long list of assumptions. T his is true. T he assumptions are based on logic, common sense, and the information available. Often this is hearsay, but, unlike the lay witness, experts are permitted to use hearsay. Make sure the jury knows this if it becomes an issue. You can, however, minimize the assumptions with the proper use of witnesses who testify before the economist. For example, when family members testify, go into the subject of the services performed around the home and for the family. Have your doctors, nurses, and rehabilitation experts provide the data the economist is relying on. If possible, introduce birth certificates, death certificates, and employment records. If a former employer testifies, ask him about the policy for granting raises and promotions, and the stability and security of the job held by the plaintiff. In short, eliminate as many assumptions as possible by offering factual information.
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50
19 §1464 Rehabilitate Your Expert on Redirect Although you can tell your expert what he will be asked on direct, he is on his own during cross-examination. At times, you can protect him with objections, but not always. If you know your opponent has cast some doubt on your expert’s testimony, it is up to you to ask the questions that will allow the expert to clarify everything. If possible, try to get a recess right after cross-examination is complete. You may find that the expert knows exactly what you should ask him to counter what has occurred. If you can’t get a recess, then go back to the topics where your expert was not allowed to give an explanation, even though he tried, and ask if he would now care to elaborate on what may have been restricted to a yes or no answer on cross examination. With carefully worded questions, you can give your expert some rather general openings to offer a more complete answer to any hypothetical questions asked on cross-examination.
§1465 Difficult Issues on Cross-Examination • Assumptions: Many attorneys will ask about an the assumptions made in reaching an opinion of losses. He will ask whether the economist has verified everything possible, including such obvious things as date of birth of the plaintiff. It is extremely rare that an economist will examine the birth certificate of the plaintiff, and it is not necessary that he do so. Nevertheless, the opposing attorney will build up an impressive list of assumptions made and ask whether the appraisal is accurate if any of the assumptions are incorrect. Yom economist should never argue over assumptions. Of course, he made many, and should freely tell the jury. T he purpose of this type of examination is to make an assumption appear to be nothing more than a guess, thereby weakening the effect of the calculations made. It is not a series of questions that should lead to an argument, and certainly your economist must avoid going on the defensive as it makes him appear to be an advocate. One of the spontaneous responses I have heard an economist give, after being grilled endlessly on assumptions, was to look at the jury and tell them that not once in his life had he seen a baby squirrel, but he assumed they must exist. • Wrong field of expertise: Economists should be alert for questions that could be better answered by an expert in another specialty. For example, the economist should never give opinions regarding shortened life expectancy, vocational rehabilitation possibilities, the need for any medical procedure, an opinion as to who was at fault, or a legal opinion regarding collateral sources. If your case has been prepared properly, an of these things will have been testified to by prior experts and the economist should state that he is relying on their professional opinions, not his own. • 100% certain: Increasingly, attorneys are using guides written for cross examination, and one recent guide recommends asking, at the end of the deposition or trial, whether the economist is 100% certain that his estimate of the loss is correct. Of course, he is not and should never say that he is. He should tell the jury that, no, he is not 100% certain about the future, but based on prior testimony and information provided to him, the estimate is the most likely or most
Copyright © Dr. Frank Tinari 2009. All rights reserved.
51
20 probable estimate at that time testifying under oath to tell the truth, and that he is offering them the very best estimate he believes can be make. • Unlimited resources: Another closing question being asked on cross-exam goes like this: “ Dr., if you were given unlimited resources and funds, is there anything you would do in researching your opinion of the loss that you have not done in this case?” T his should be easy, but some economists have tripped up over it. In several thousand cases, I have never had a retaining attorney tell me up front the maximum number of hours I could put in on the job, or the maximum amount of time that I could bill. Consequently, I have always operated under the belief that I have unlimited resources and funds in all cases. Just have you economist tell the jury he had no restrictions placed on him either resources or funds. • First year interest: In many evaluations, the total loss will, when invested, generate more in interest earnings in the first year than will be needed to pay the loss in that year. T he typical questions here is to have the economist tell the jury what is lost in the first year and how much will be earned in interest in the first year. Sometimes, the attorney will continue by asking if the same amount is earned each year and that the amount is taken by the plaintiff, isn’t it true that he will still have the original award at the end of his worklife. Certainly, that is true, and the questions usually stop there. On redirect, just ask your economist what is wrong with that assumption, and he will easily explain that, because earnings increase each year, but interest earnings, don’t, eventually there will not be enough earned in interest to pay the loss in future years, and at that time the award itself, will begin to be depleted, reaching a zero value at the end of worklife. (T his is also known as the unanswered question. Defense at torney will not ask this to the economist, but will wait until he has gone and appear to think of it for the first time in closing argument. He may tell the jury, “ isn’t it too bad the economist is not here to answer that question.” Now this becomes your problem because the economist cannot be recalled. either head it off by covering in on direct, or remind the jury that the economist was present and ready to anwser any questions posed on cross-examination). • T he average person: Many times, the economist will have to rely on studies and government statistics to calculate a loss. For instance, it is common to rely on life expectancy and worklife expectancy tables, average household service value studies, personal consumption studies, and other items that pertain to large groups rather than the individual plaintiff. T his may be the focus of cross-exam questions, and in most cases, the best answer your economist can give is to say he assumed the plantiff was neither better nor worse than the average.
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52
21
Frank D. Tinari, Ph.D. Brief Biography
Frank D. Tinari, Ph.D., is Professor Emeritus of Economics at Seton Hall University and President of the Tinari Economics Group, a consulting practice he founded in 1979, with offices in New Jersey and New York City. He also has taught at Fordham, Pace, Purdue, William Paterson and Drew Universities, and was an invited repeat lecturer at the University of International Business and Economics in Beijing. Tinari holds an earned doctorate, as well as a B.S. (‘64) and M .A. (‘66) from Fordham University . Dr. Tinari is a past President of the National Association of Forensic Economics (NAFE), and is a member of the American, Western and Eastern Economic Associations, and the American Academy of Economic and Financial Exp erts. He also served a 4-year term as the elected M ayor of Florham Park, New Jersey, during which time he was instrumental in recruiting the NY Jets to move its national headquarters and state-of-the-art training facility to Florham Park. Frank has lectured widely for professional organizations including NELA, the Inns of Court, NJ ICLE, Seton Hall University Law School, the New York State Trial Lawyers Institute, ATLA-NJ, the New Jersey State Bar Association, and the International Association of Defense Counsel. From 2002 through 2004, he worked closely with Trial Lawy ers Care to assist claimants of the 911 Victims Compensation Fund, and testified at dozens of hearings before Special M aster Ken Feinberg. The author of a college textbook, Frank is widely published in numerous journals and publications. He serves as editorial reviewer for the Journal of Economic Education, Journal of Legal Economics, and the Journal of Forensic Economics. He has p rovided expert testimony at over 700 trials, arbitration hearings and oral dep ositions. Frank may be reached at 973.992.1800 or by email at [email protected]
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53
