In more than 25 years as a forensic economist, I’ve worked on many kinds of cases, including complex commercial matters, environmental permitting processes, and actions for alienation of affection. I was once a liability expert in an antitrust case. And, one time, I was hired to devise a statistical sampling design.
But the bread and butter for any forensic economist are personal injury and wrongful death cases. They account for most of our work. I’ve served as the damages expert on many wrongful death cases, working for both plaintiffs and defendants. Over the years, I’ve learned that they can be tricky in ways that make them interesting and sometimes surprising.
Two Key Factors
In NC and many other states, two factors contribute to this. First, the people who receive compensation in a wrongful death action must be able to inherit under NC’s Intestate Succession Act. In other words, damages beneficiaries must be estate beneficiaries. Second, the state’s wrongful death statute refers to “the net income of the decedent,” where net income is understood to be income after subtracting the decedent’s personal consumption.
The first restriction trips up a lot of cases; although, I’ve seen many pushed forward anyway. The decedent might be a minor child or a young adult who was single and childless. The parents are usually the plaintiffs in such cases, and it’s hard for them to cite evidence that their child would have supported them financially. If they can’t, there’s nothing for me to calculate.
There is, of course, a profound emotional loss when parents lose a child, and hence much room for non-economic damages. But while the pain felt by survivors is intense, I have nothing to say about it as an expert. My job is to treat each case like a math problem, and the equation for economic damages doesn’t include emotion.
A Brilliant Solution
In one case, in which I worked for the plaintiff, the attorney came up with an ingenious one-time solution. The decedent was a young girl in a family of Mexican immigrants. After I explained the difficulty of the case, my client hired an expert in Mexican family life. The expert laid out various tangible ways in which a teenager and adult woman from that background would support her family. The expert’s opinion allowed me to do an unusual, though valid, projection of economic damages.
Sometimes, the decedent is a single parent whose children will soon leave the home or have always lived with the other parent. In both scenarios, the absence of a spouse implies an assumption that there are no economic damages when no children are in the home. I can’t say that no financial support would ever be provided, but my view is that when people don’t live together, the burden is on the plaintiff to show evidence of financial support.
In one case, a couple of childless spouses died at the same time, leaving heirs who were distant relatives and had never benefited financially from the decedents. The implication was zero economic damages, and I advised the plaintiff’s attorney not to hire me.
Personal Consumption
The second factor that complicates wrongful death cases is personal consumption. PC is the portion of the decedent’s income that was unavailable to his or her family because it was spent on the decedent’s own food, clothing, etc. The calculation of PC is based on household income, and the challenge is when the decedent’s income was much less than the surviving spouse’s.
For example, consider a couple in which the surviving spouse’s income was $200,000 while the decedent earned $50,000. If the PC rate for the decedent is 20%, then we’d calculate the decedent’s PC as 20% of the couple’s aggregate income of $250,000, which in this case happens also to be $50,000. In this example, the decedent’s net income for purposes of a wrongful death action is zero.
Most cases don’t involve such extreme situations. But when it comes to economic damages, one must be careful with wrongful death actions. The equation for economic damages can be unforgiving.
