Excerpt from Chapter 11: Economic Damages at Trial
Economic/Hedonic Damages: The Practice Book for Plaintiff and Defense Attorneys
by Michael L. Brookshire and Stan V. Smith
General
The overriding rule for the plaintiff’s attorney and economic expert is that economic testimony must be made as straightforward and understandable as possible.
This may appear obvious and easy to follow at first blush, but economists have tendencies to complicate rather than clarify issues, and lawyers sometimes don’t put in the preparation time which is necessary on how the economist can most effectively say what he has to say.
The court system does not set prerequisite courses in economics for jurors. It is the attorney and economist who must tailor the method of presentation to the jury, not the jury which must bone up on principles of economics.
For this reason, the following line of questioning may usefully be employed toward the end of direct examination:
- Question: Professor Economist, you’ve explained how many complicated factors — wage growth rates, fringe benefits, discounting to present value, and so on — produce your $500,000 estimate of lost earning capacity. Couldn’t you get about the same answer by taking Mr. Green’s $26,000 in earnings in the last full year before his death by multiplying this by his 21 years of future working life? Couldn’t the jurors do such a multiplication, themselves?
- Answer: Yes. Because wage growth rates and interest or discount rates come close to offsetting each other in this particular case, your simple method would be less than 10 percent different from my estimate and it would be almost 10 percent higher than my estimate.
Because of the overriding desire for simplicity, many plaintiffs’ attorneys want crisply moving testimony by their economist, consuming no more than 30-45 minutes. This can be effectively accomplished in most situations.
Other plaintiffs’ attorneys are not concerned about the total time of direct examination per se. Rather, they wish to ensure that the economist can hold the interest of the jury throughout his testimony, having them understand what he says to the maximum extent possible and trusting that he knows what he is talking about.
This is, again, why the selection of an expert is so critical.
In the best case, the economist relates to the jury as a well prepared and effective teacher, and the jurors assume the role of students who are guided and enlightened by what the economic expert says.
Checklist of Questions
Checklist 1 provides possible questions to be asked the economic expert in direct examination. Also, Appendix 1 provides a complete sample testimony with direct, cross, and redirect examination.
This testimony is based upon the Jack Doe illustrative case, which has been carried through previous chapters.
Some elaboration on the checklist may prove helpful. For example, the series of questions on qualifying the forensic economist may be especially important when another economist is scheduled to testify for the defense, and a “battle of experts” may ensue.
Even if the opposing economist is experienced in the forensic specialty, he or she may not be as qualified or experienced in the emerging sub-specialties of forensic economics which are relevant to the particular case.
The person may not be a labor economist, for example, with a good background or publications in wage and fringe benefit matters; or, the case may highlight issues in costs of care, work-life expectancy, hedonic damages, or commercial damages.
The plaintiff’s attorney obviously should lay any groundwork for the relative qualifications of his expert versus the defense expert. 1
Question #2 is not terribly relevant but its purpose is to allow the experienced economic expert to provide a “down-to-earth” answer, establish eye contact with the jury, and begin to build rapport with the jurors.
The next question lays the foundation for the “bottom line” estimate and may be especially important in state courts. The written reports of economic experts should list these major facts and assumptions so that the list can be read or at least paraphrased, and the foundation for expert opinions thereby established.
We have found that the review of facts and assumptions can also serve to give jurors an overview of calculation issues and methods, as demonstrated in Appendix 1. The jurors are then hearing new terminology for the second time in the answer to Question #5.
The fourth question is designed to present the “bottom line” estimates to the jury early in testimony. At this point, a blown-up chart may be presented which depicts the bottom line estimate(s), can be kept before the jury, and will be introduced as an exhibit.
The strategy is to lay out these numbers early, then simply explain how they were produced, then reiterate the numbers, and then, perhaps, to anticipate questions in cross-examination.
Some economists, in answer to Question #5, will provide a table-by-table explanation of each calculation table in the written report. We think that such a presentation scheme is unnecessarily cumbersome and time-consuming.
As demonstrated in the Appendix 1 sample testimony, the same result can be effectively accomplished by placing before the jury enlargement s of one or two of the calculation tables. Usually, most of the explanation for the entire analysis can be accomplished with reference to the calculation table for future wage or salary loss. Jurors learn what it means to “Teeter, Totter, and LPE.”
The plaintiff’s attorney is probably less likely to err, and reduces stress on himself, by asking the open-ended Question #5 and giving the forensic economist freedom to talk it through.
However, the attorney plays an important role as a listener and pacer.
If the economist begins to talk over the head of the jury or talk too fast, for example, the attorney must intervene with specific questions. He or she should have an agreement with the economist to interrupt with such questions as “Slow down” or “Could you explain that again so that I can understand it?”
Question 6 is the wrap-up (especially in the absence of hedonic testimony focusing again on the lump sum estimates of loss already in front of the jury on a blown-up chart.
Particularly if there is a range of loss estimates, from a low to a high based upon alternative assumptions, the economist should offer an opinion as to which is the most accurate. This will be based upon facts regarding the injured or deceased party.
In a minor child case, with alternative earnings estimates for a deceased child as a high school or college graduate, the economist may admit that “only God knows” where the child would have ended up in the range, but that at least a minimum and a possible maximum have been established.
Another example is when the economist has shown in his summary table a “continuous employment” estimate through life expectancy and a lower estimate with LPE reduction for average persons.
The economist may help the jury narrow down the range of loss by discussing the fact, if it is true, that the “P” and “E” track record of the deceased in his past was considerably above average for that range of ages.
CHECKLIST 1
FOR DIRECT EXAMINATION OF ECONOMIC EXPERT
- Qualify expert: education; publications; teaching; consulting; past experience in loss estimation and testimony.
- What is economics and how is it relevant to this case?
- What major facts and assumptions were used to produce loss estimates in this case?
- What is your estimate of lost earning capacity and other economic losses in this case?
- In more detail, please tell us how you arrived at your final estimates of economic losses.
- Just so we are clear, what is your best estimate of the present value of loss of earning capacity and lost household services in this case?
- (Anticipated defense questions and/or closing arguments on damages.)
- Please explain how you estimated the lost pleasure or value of living, apart from lost earnings and household services.
In question #7 or a series of such questions, the plaintiff’s attorney may anticipate questions to be asked later by the defense. In our opinion, an absolutely misleading but intuitively appealing “best defense question” is as follows:
- Question: Professor Economist, isn’t it true that if Mr. Green’s family were given $913,213 today, they could invest this in U.S. government bonds and earn 10% interest, or over $90,000 in interest earnings? Couldn’t they earn $90,000 this year and next year and every year and still have the $913,000 principal amount remaining when Mr. Green would have retired or died? And wouldn’t you be providing $90,000 in the first year of alleged loss when Mr. Green would have earned only $25,000 in wages and fringe benefits?
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