PROVING DAMAGES AT RIAL - Amazon S3 · Seminar on Proving Damages at Trial ... s ng ni r a E d e t us dj A s ng ni r a E %] ... 2001 100% 24,758 17,454 7,719 5,669 11,786

PROVING DAMAGES AT TRIAL ~

DIRECT EXAMINATION OF A FORENSIC ECONOMIST

MATERIALS BY Dr. Frank Tinari

Seminar on Proving Damages at Trial NYS Academy of Trial Lawyers

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.TinariEconomics.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 test imony, even when expert is narrat ing the damages story

1.5. Simplicity, clarity, and logical order take precedence

2. T rial strategy:

2.1. Qualify your expert , even if other side st ipulates to qualificat ions

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 calculat ion of household services.

3. Changes in test imony

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 narrat ive 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 writ ten report is not submitted as evidence.

4.2. It is the expert’s oral test imony 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. Simplicity, clarity, and logical order

take precedence.

4.4. Pros and cons of laptop use in courtroom.

33Copyright © Dr. Frank Tinari 2009. All rights reserved.

2

5. Use of Demonstrat ive Charts vs. Spreadsheets in Reports

5.1. Clarity vs. completeness

5.2. Streamlined & simplified terminology

(e.g., stat ist ical worklife expectancy v. worklife; percent v. decimals; font size)

5.3. Logical sequencing (build-up method v. start ing with total)

5.4. Blown-up charts on boards or projected charts?

If projector, have several hard copies available.

5.5. Simplicity, clarity, and logical order take precedence

6. Case Study of Injured Woman

[Video projection of at tached charts]

7. Additional reading:

see excerpt from Determining Economic Damages by G. Martin


3

Donna Smith

born: July 19, 1966

impaired: December 9, 1998

age at impairment: 32.39 years

education: high school

life expectancy: 81.89 (June 8, 2048)

statistical retirement age: 61.46 (January 3, 2028)

projected retirement date: July 19, 2028 (28 yrs of service)

worklife: 77.3%

health: functioned normally

expected employer: Middle County Police Department (MCPD)

expected position: clerk typist

post-injury employer: Bob Grant School District (BGSD)

post-injury position: clerk typist

spouse: Michael

Components of Analysis

1. net earnings in past years

2. net earnings in future years

3. net pension income

4. household services


4

Earnings History

Year

W-2 Earnings

MCPD 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%


5

Earnings Adjustments

MCPD BGFD

Gross Earnings Base 100% 100%x Worklife Adjustment 77.3% 77.3%

- 4%, 0% unemployment 4% 0%- 5% job maintenance expenses 5% 5%

= Adjusted Earnings Factor 70.5% 73.44%

Net Earnings LossPast Years

Year

Portion

of Year

Estimated

MCPD

Gross

Earnings

[@ 3%]

Adjusted

Earnings

[70.50%]

Actual

BGSD

Gross

Earnings

Adjusted

Earnings

[73.44%]

Net Loss

[(4)-(6)]

(1) (2) (3) (4) (5) (6) (7)

2000 50% $ 11,915 $8,400 $ 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

total: $83,361


6

Net Earnings Loss

Future Years

Year

Portion

of Year

Estimated

MC PD

Gross

Earnings

[@ 3.9% ]

A djusted

Earnings

[70.50% ]

(1) (2) (3) (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 $ 6 4 2 ,1 0 6


7

Pension Calculation

Assumptions

assumed date of retirement: July 19, 2028

statistical date of death: June 8, 2048

years of service at retirement: 28

employee contribution: 3% of salary

cost-of-living adjustment: none

Pension Formula

2% x FAS x Years of Service

Final Average Salary (FAS)

Year 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


8

Projected Annual Employee Contributions

(required for first 10 years of service)

Year

Annual

Contributions

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


9

Net Pension Income

Year Annual 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

employee contributions (8,425)

total: $ 652,608


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%


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

2008 (25%) 286 12.24 3,500

total: $ 96,238


12

Household Services ValuationFuture Years

Year

Annual

Hours

Annual

Value

[@ 3.9%]

2008 (75%) 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


13

Year

Annual

Hours

Annual

Value

[@ 3.9%]

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: $ 1,016,819


14

Household Services Loss

Value of

Household

Serv ices

Assumed 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

Total Loss $223,294 $335,030 $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 *household services - past years

203,346 305,109 406,692 *household services-future years

$ 1,600,669 $ 1,712,055 $ 1,823,262 total value of loss


16

Excerpts from:

Determining Economic Damages

Gerald D. Martin, Ph.D.

Production edit ing

by Krist ine McDowell and Amanda Winkler

Edited by Krist ine McDowell

Contact us at (800) 440-4780 or www.jamespublishing.com


17

Related Texts

Slip and Fall Practice, TurnbowLitigating Neck & Back Injuries, Tarantino

Model Interrogatories, Culhane

Personal Injury Forms: Discovery & Settlement, Tarantino

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18

Chapter 14, Selected Sections

§1461 Qualifying Your Expert

Always go through your expert’s qualificat ions. Quite often, opposing counsel will offer to

st ipulate to the expert’s qualifications. T here may be several reasons for this st ipulation. 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 st ipulat ion is offered, goright 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 nowcovered all of the est imates 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 test imony 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 itbecomes an issue. You can, however, minimize the assumptions with the proper use of

witnesses who test ify before the economist . For example, when family members test ify, go into

the subject of the services performed around the home and for the family. Have your doctors,

nurses, and rehabilitat ion experts provide the data the economist is relying on. If possible,

introduce birth cert ificates, death cert ificates, and employment records. If a former employer

test ifies, ask him about the policy for granting raises and promotions, and the stability andsecurity of the job held by the plaintiff. In short , eliminate as many assumptions as possible by

offering factual information.


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 t imes, you can protect him with objections, but not always. If you know

your opponent has cast some doubt on your expert’s test imony, 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 thetopics 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 at torneys will ask about an the assumptions made in reaching an opinion

of losses. He will ask whether the economist has verified everything possible, including suchobvious things as date of birth of the plaintiff. It is extremely rare that an economist will

examine the birth cert ificate of the plaintiff, and it is not necessary that he do so. Nevertheless,

the opposing at torney 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, therebyweakening the effect of the calculat ions 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 expert ise: 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 rehabilitat ion possibilit ies, 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 test ified toby prior experts and the economist should state that he is relying on their professional opinions,

not his own.

• 100% certain: Increasingly, at torneys 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 est imate of the loss is correct . Of course, he is not and should never saythat he is. He should tell the jury that , no, he is not 100% certain about the future, but based on

prior test imony and information provided to him, the est imate is the most likely or most


20

probable est imate at that t ime test ifying under oath to tell the truth, and that he is offering them

the very best est imate 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 themaximum amount of t ime 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 restrict ions placed on him either resources or funds.

• First year interest : In many evaluations, the total loss will, when invested, generate more ininterest 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 at torney 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 st ill 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 thatassumption, 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 t ime 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 t ime in

closing argument. He may tell the jury, “ isn’t it too bad the economist is not here to answer thatquestion.” 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 governmentstat ist ics 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.


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 Experts. 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 Lawyers 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

provided expert testimony at over 700 trials, arbitration hearings and oral depositions.

Frank may be reached at 973.992.1800 or by email at [email protected]


Documents

PROVING DAMAGES AT RIAL - Amazon S3 · Seminar on Proving Damages at Trial ... s ng ni r a E d e t us dj A s ng ni r a E %] ... 2001 100% 24,758 17,454 7,719 5,669 11,786