Forensic Economic Evaluations

What is a forensic economist?

A forensic economist is the expert who turns an injury, a death or the loss of a job into one figure for the court: the earnings and benefits the person will not receive, the unpaid work the household has lost and the future care that will have to be paid for, each projected over the years it runs and expressed in today's dollars.

The inputs are records, not an examination. The earnings come from pay records and tax returns, the ability to work from the vocational expert where it is disputed, and the care needs from the life care plan; the report then shows every assumption beside its source, so an opposing economist can substitute a different figure and see exactly what changes.

What a forensic economic evaluation quantifies

Four categories of loss recur. Lost earnings and lost earning capacity come first: the loss already incurred is read from pay records up to the valuation date, while the loss still to come is a projection that rests, when the ability to work is disputed, on the vocational opinion; the earning capacity versus lost earnings guide separates the two. Fringe benefits ride on that earnings stream: health coverage, retirement contributions and the employer's payroll taxes are added to the wage. Lost household services stand apart from paid work: cooking, cleaning, yard work, child care and the other tasks the person can no longer do are priced at what hiring them out would cost, the analysis the household services practice prepares. Future care enters as a schedule rather than an estimate: the life care plan supplies each item with its frequency and unit cost, and the economist projects and discounts that schedule; the future medical costs guide follows the hand-off. In a wrongful death case the same categories are projected for the decedent, less the share of income the decedent would have spent on personal consumption.

Present value and the assumptions behind it

A future loss is a stream of yearly amounts, and the award that replaces it is paid once, so the stream has to be reduced to a single sum. Three assumptions decide that sum. How long the stream runs comes from worklife expectancy tables, the years of work statistically remaining to someone of the person's age, sex and education, rather than from a fixed retirement age. How fast the amounts grow comes from published wage projections rather than the person's best year. The rate the stream is discounted at, set against that growth, gives the net discount rate, and the present value method page explains how it is chosen. Reasonable economists choose differently, so the report shows the sum across a range of each assumption and lists every input with its source. The damages calculation explainer walks through the arithmetic, and the damages estimator lets counsel try the inputs at a planning level.

How a forensic economic engagement proceeds

Scope, conflicts and the retainer are settled in writing before any file is opened, and the data arrives next: the earnings history in its records, and the vocational opinion or the life care plan the damages rest on, because the economic analysis begins where those opinions end. Six steps then follow, listed below in order; the engagement process page walks through each step in turn.

Typical timeline

A complete report is typically 30 to 60 days from receipt of complete records; rebuttal and supplemental analyses follow the opposing reports, and each phase's duration is on the timeline page. Where the analysis rests on a vocational or life care opinion, the window starts once that opinion is final.

What a forensic economic evaluation costs

The fee follows the damages claimed and the file behind them: every category of loss is another stream to model, a contested assumption adds a sensitivity range, and an opposing report adds a rebuttal phase. A written estimate precedes the engagement. The fee range, the cost drivers and the billing terms are on the cost page.

Deliverables

The engagement produces up to four things. The written report is the primary one: it separates the loss already incurred from the loss still to come, discounts the second to the valuation date, names its sources and its discounting method, and shows how far the total moves when each assumption moves, so a reader can rebuild the figure from the report alone. The second is the written rebuttal of an opposing calculation. The economist who wrote the report is the one who gives deposition and trial testimony on it. The fourth is the supplemental report, served when new earnings records arrive or the vocational or life care opinion changes.

Who retains a forensic economist

Plaintiff counsel retains an economist to state the loss; defense counsel retains one to test the figure claimed or to prepare an independent one. The retaining side chooses the question; the method, the tables and the sources are the same either way, so a figure prepared for one side has to survive the audit the other side's economist will give it. The economist does not decide whether the person can work or what care the person will need; the vocational expert and the life care planner do, and the economic report takes their findings as given. The forensic economics article explains the discipline, and the damages expert guide says which of the three experts a case needs.