Academic journal article Journal of Forensic Economics

It's about Time: The Forensic Economic Evaluation

Academic journal article Journal of Forensic Economics

It's about Time: The Forensic Economic Evaluation

Article excerpt

I. Introduction

Federal and state legal systems rely upon the reasoning of judges and juries to ascertain what is just compensation for personal injury as result of a tort. There are no precise rules to follow in determining damages. Jurists consider the plaintiffs' own itemization of damage, but they also use their own reasoning and the guidance of the law and testimony of forensic economists. Likewise, each forensic economist uses his or her reasoning, legal parameters, and economic training in determining just compensation.

The provision of economic relief for persons suffering personal injury is a basic tenant of our society. The agents for relief for injury outside of litigation are bureaucracies that follow precise legislated statute or contracts in making their determination of economic relief. Societal programs such as the Social Security Administration, Workers' Compensation, and Veterans Administration disability benefits attempt to develop impartial and objective methods for determining the level of support appropriate to a person in particular circumstances. While many components of forensic economic evaluations of compensation to a Plaintiff due to a tort are the same as those in a bureaucratic relief evaluation, important differences exist that make the two evaluative processes incompatible. In this paper, we discuss the similarities and differences of these two evaluative processes to emphasize the unique contribution the forensic economist makes to the evaluation of relief necessary for personal injury.

Bureaucratic evaluations are concerned with the claimant's current capabilities. The forensic economist extends the bureaucratic evaluation to include a prediction of the claimant's probable future capabilities based on the observed traits of persons similarly situated to the Plaintiff. The forensic economist provides testimony to give the jurists necessary information in order to make predictions of the Plaintiffs future pecuniary economic situation with pre-injury and post-injury assumptions and discoveries.

We begin the paper with a comparison of the evaluation procedures employed by societal or bureaucratic relief providers (i.e., Social Security, Workers Compensation, Veterans Administration, etc.) and economists in litigation. We then expand the discussion of the forensic economic evaluation to include how economists use the economic variables of productivity, allocation of time, output, and economic return(1) within the forensic economic evaluation. We point out that forensic economic considerations are not thoroughly analyzed with the bureaucratic relief frameworks and may result in a different outcome than a bureaucratic evaluation.

II. Bureaucratic Compensation Mechanisms

Many bureaucratic institutions provide economic relief to the injured and disabled. Claimants seek economic relief for the incidence of injury or disability. The determination of possible relief is associated with the claimant's situation at the time of application for benefits. In the context of personal injury, five bureaucratic institutions are common: the Americans with Disability Act (Equal Employment Opportunity Commission--EEOC), Social Security Administration, Veterans Administration, Workers Compensation Insurance, and Private Disability Insurance. In this section of the paper, we look at the evaluative processes of these economic relief providers. We compare and contrast the evaluations within each system with the forensic economic situation.

A. Americans with Disabilities Act (ADA)

Congress passed the ADA to enable the participation of individuals with disabilities in all aspects of society, particularly employment. The ADA covers `qualified individuals with a disability'. Two steps determine whether an individual with a disability is qualified. The first step determines if the individual has the education, training, skills, experience, and other job-related credentials for the position being denied. …

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