Kaczkowski v. Bolubasz
Subject: Three dominant approaches to discounting future losses to present value.
FACTS
-Automobile accident, Decedent Pl. riding as a passenger in vehicle operated by Def.
ISSUE
Did trial court error in excluding reliable economic testimony showing the impact of inflation and increased productivity on decedent’s future earning power?
RULES
Inflation - The increase in volume of money and credit relative to available goods resulting in a substantial and continuing rise in the general price level.
-Damages are to be compensatory to the full extent of the injury sustained.
-Rule: To give full compensation, graduating the amount of damages exactly to the extent of loss.
-Inflation and productivity are necessary to factor into such awards.
-A claim for damages must be supported by a reasonable basis for calculation; mere guess or speculation is not enough.
(Loss of future wages is discounted to its present value by using the 6% simple interest figure)
[Three approaches]
1. Traditional - Ignores inflation and future productivity, “too speculative”, previously adhered to.
2. Middle Ground - prohibits expert testimony. Up to the fact finder.
3. Evidentiary Approach - Allows fact finder to consider productivity and inflation. Many ways to incorporate economic data.
a) Feldman approach - extrapolation of deceased’s life: grades, employment history, opinion held by fellow workers, employment goals, potential jobs qualified for.
-Inflation component: Offset present value method:
Subject: Three dominant approaches to discounting future losses to present value.
FACTS
-Automobile accident, Decedent Pl. riding as a passenger in vehicle operated by Def.
ISSUE
Did trial court error in excluding reliable economic testimony showing the impact of inflation and increased productivity on decedent’s future earning power?
RULES
Inflation - The increase in volume of money and credit relative to available goods resulting in a substantial and continuing rise in the general price level.
-Damages are to be compensatory to the full extent of the injury sustained.
-Rule: To give full compensation, graduating the amount of damages exactly to the extent of loss.
-Inflation and productivity are necessary to factor into such awards.
-A claim for damages must be supported by a reasonable basis for calculation; mere guess or speculation is not enough.
(Loss of future wages is discounted to its present value by using the 6% simple interest figure)
[Three approaches]
1. Traditional - Ignores inflation and future productivity, “too speculative”, previously adhered to.
2. Middle Ground - prohibits expert testimony. Up to the fact finder.
3. Evidentiary Approach - Allows fact finder to consider productivity and inflation. Many ways to incorporate economic data.
a) Feldman approach - extrapolation of deceased’s life: grades, employment history, opinion held by fellow workers, employment goals, potential jobs qualified for.
-Inflation component: Offset present value method:
[Discount rate - Inflation rate = “real” rate of interest], 1.5%
b) Alaska approach
*Calculate lost future earning capacity of victim over work-life expectancy.
“Automatic step increases keyed to the length of service are by their nature, certain and predicable at the time of trail.”
-Excludes non-scheduled salary increases/bonuses (speculative), in terms of skill, experience and value to the employer.
Total offset method -no need to discount. Inflation completely offsets interest.
[Court adopts]: Feldman’s approach to calculating lost productivity and Alaska’s total offset approach to inflation and discounting to present value.
-best computes a damage award that will fairly compensate victim and avoid unnecessary complexities.
[Total Offset Method]
-Greater accuracy
-If a variance, will fall in favor of the victim and not the tortfeasor.
-contribution to judicial efficiency.
Holding: New standard, Total offset method replaces discounting, new trial on damages.
-best computes a damage award that will fairly compensate victim and avoid unnecessary complexities.
[Total Offset Method]
-Greater accuracy
-If a variance, will fall in favor of the victim and not the tortfeasor.
-contribution to judicial efficiency.
Holding: New standard, Total offset method replaces discounting, new trial on damages.
Checking out our amazing store on Etsy: http://www.bohobuttons.com
While in law school I traveled the world. Puerto Rico. Egypt. Israel. The Netherlands. All over the United States. Costa Rica. Panama... How, you ask? I found ways to make money on the side. One of those ways was hosting my apartment on AirBnB. If you have an extra room, this is a perfect way to make some extra cash.
No comments:
Post a Comment