• Actual earnings and benefits
• Expected earnings and benefits
• Work life expectancy

According to Bays, determining actual and expected earnings can be challenging, especially when the claimant is a well-paid executive with stock options and incentive plans as well as a salary. When a high level Fortune 100 executive was dismissed from his job and sued for age discrimination, Gleason was asked to determine the reasonable value of his complex compensation package. We also evaluated his future earnings in his current position as the chief executive of an entrepreneurial business. Although the jury agreed with the discrimination claim, no damages were awarded since the executive's future income was potentially as rewarding as his past compensation.

When the claimant is a self-employed business owner with tax returns that may not reflect actual income, determining earnings to support a damage claim can be a contentious process. In these cases, we analyze the tax returns, comparing the reported profitability to the amounts the plaintiffs claim they would have earned but for their loss," explains Bays. "A successful claim in these cases requires credible testimony from the business owner and customers. Typically, though, plaintiffs are made to live with their tax returns."

Personal Injury and Wrongful Death

The burden of proof in injury loss and wrongful death claims is similar to claims resulting from the loss of employment, although work life expectancy is often a prominent factor. While plaintiffs typically claim an intention to work until age 65 or 70, statistics show that the average person retires earlier.

"When clients claim expected earnings into the late 60s and 70s, a case must be made for why their situation is atypical," says Bays.

In addition, damage claims for personal injury or wrongful death must take into account the potential purchase of household and personal services that were not required when the claimants were healthy enough to do chores for themselves. This, too, can be a mine field.

"If a husband dies, the wife might need to pay someone to mow the lawn, but she wouldn't be necessarily entitled to the value of a handyman unless her husband also maintained the house on his own. And then, the value of his potential handyman services would be limited to the historical amount of the services he actually provided," Bays explains.

The issue of personal consumption also factors into wrongful death claims. When a financial contributor to the family unit dies, the family loses the person's income, but it also loses the individual's expenses and spending habits. This must be considered in an economic loss evaluation. "Most people consume the majority of their income," notes Bays, "so at the end of the day, the actual economic loss itself can be fairly small."

Excerpted from Briefly Speaking, a complimentary newsletter published by Gleason & Associates. .


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