Discovery of Damages in Med Mal Cases

Last month, we began discussion of the importance of conducting discovery on damages in the early stages of case preparation. Such early homework will give the client a better chance of recovering the damages he or she is entitled to.

To illustrate the steps that should be taken, we took the example of the Smiths, a hypothetical extended family of five involved in an auto accident. In that case, the father, Roger, died instantly. His 14-year-old son Ryan suffered a spinal-cord injury that left him permanently disabled. His wife Beth was mildly injured. Roger's father Tom died two weeks after the accident of injuries sustained in the crash and Roger's mother, Renee, was uninjured.

The basic elements of damages in injury and death matters are: 1) lost earnings; 2) lost fringe benefits; 3) medical costs; and 4) lost household services. We covered the analysis of the element of lost earnings in last month's issue, and continue herein.

Lost Fringe Benefits

Roger Smith

Roger might have enjoyed economic benefits from his employment above and beyond his paycheck and partnership interest in his accountancy firm. These fringe benefits could include health and pension benefits, disability insurance and the use of a company car. The details of such extra economic benefits can be found in partnership and firm documents. However, some items considered to be fringe benefits should not be included as damages in a survival or wrongful-death claims. Disability insurance, for example, is intended to support an injured worker. It does not count as an economic benefit unless it is used, and so should not be included as an item of damages. Similarly, the company car is not an element of damages. Fringe-benefit items that generally count toward damages include company-paid health insurance, company-paid life insurance and pension, since these are benefits the plaintiff has actually lost as the result to the tort.

Medical Costs

Future medical expenses are calculated by medical-cost specialists. They make charts referred to as life-care plans, showing what the plaintiff will need for future medical care. This element of damages is, of course, strongly affected by life expectancy in instances where the injury is permanent. Examples of future medical costs include therapy, medical supplies, special education needs and special housing and transportation needs.

Ryan Smith

In Ryan's case, life expectancy given his injury is a key factor in the extent of damages. If it is close to the average expectancy for 14-year-old males, chances are his future medical costs will be significant. In fact, most very large injury verdicts involve significant medical costs.

Beth Smith

Beth Smith's medical costs would likely be limited to past medical bills, plus whatever might be needed in the future. Although her injuries were mild, there might be evidence that her injury may have some lingering effect. A source for this element of loss would be testimony by a medical expert.

Tom Smith

Tom Smith's medical expenses attributable to the accident are recoverable by his estate.

Household Services

Household services are the value of services provided by a plaintiff or decedent for the benefit of other family members. Sources for the amount of household services rendered and their value include government and academic studies and the cost of services from commercial providers. Note that household-services damages should be limited in duration by joint-life expectancy and healthy-life expectancy.

Beth Smith

Beth has lost her husband's services. He might have performed such tasks as landscaping or certain types of home repair. If so, the loss is compensable and can be valued by determining replacement cost of such services. Key factors for discovery include the type and amount of services Roger provided. How many hours a week did he work around the house? This can be determined through deposition or by consulting various surveys that track the average amount of time married males spend on household tasks.

Renee Smith

Like Beth Smith, Renee Smith has lost the services of her husband. The extent of loss could be determined via deposition inquiry into how many hours Tom Smith worked on household chores. Being retired, he might have made significant contributions to household maintenance, making this a significant element of loss.

Maintenance

The decedents' probable personal living expenses would not be available to the surviving family members if the accident had not occurred. Any recovery by the surviving family members must take this into account. Therefore, the likely living expenses of the decedents is a key issue in determining damages to the surviving family members.

Sources for personal-maintenance values include depositions of family members on the decedent's expenditures, checking-account records, tax records, Census data and other statistical data.

Guidance on Damages Discovery

Damages to any individual in any injury matter are unique to that individual, and every damages claim deserves close scrutiny. Because the components of any damages claim involve several interlocking variables, thorough discovery is necessary to determine the extent of actual damages.

Insufficient discovery can lead to significant under- or over-valuation of claims, and a poorly prepared damages argument can also affect credibility on other issues involved in the litigation. The help of a competent economist ' retained early in the case-preparation process ' can ensure that no facet of discovery is overlooked.

Useful Documents for Damages Discovery

Tax documents / returns

1099s

W-2s

1040s

Schedule C

Lifetime earnings information from the Social Security Administration

Fringe-benefit documents

Pension plan

Health plan

Employer-paid insurance policies

Employee handbook

Decedent's or claimant's resume

Past and present collective-bargaining documents

Pay stubs

Bank-account records (checking and savings)

Chad L. Staller, J.D., M.B.A., M.A.C., a member of this newsletter's Board of Editors, is president and senior economist at the Center for Forensic Economic Studies, a Philadelphia-based firm providing economic and statistical analysis and testimony. He can be reached at 215-5460-5600 or [email protected]. More information on the Center: www.cfes.com.

Last month, we began discussion of the importance of conducting discovery on damages in the early stages of case preparation. Such early homework will give the client a better chance of recovering the damages he or she is entitled to.

To illustrate the steps that should be taken, we took the example of the Smiths, a hypothetical extended family of five involved in an auto accident. In that case, the father, Roger, died instantly. His 14-year-old son Ryan suffered a spinal-cord injury that left him permanently disabled. His wife Beth was mildly injured. Roger's father Tom died two weeks after the accident of injuries sustained in the crash and Roger's mother, Renee, was uninjured.

The basic elements of damages in injury and death matters are: 1) lost earnings; 2) lost fringe benefits; 3) medical costs; and 4) lost household services. We covered the analysis of the element of lost earnings in last month's issue, and continue herein.

Lost Fringe Benefits

Roger Smith

Roger might have enjoyed economic benefits from his employment above and beyond his paycheck and partnership interest in his accountancy firm. These fringe benefits could include health and pension benefits, disability insurance and the use of a company car. The details of such extra economic benefits can be found in partnership and firm documents. However, some items considered to be fringe benefits should not be included as damages in a survival or wrongful-death claims. Disability insurance, for example, is intended to support an injured worker. It does not count as an economic benefit unless it is used, and so should not be included as an item of damages. Similarly, the company car is not an element of damages. Fringe-benefit items that generally count toward damages include company-paid health insurance, company-paid life insurance and pension, since these are benefits the plaintiff has actually lost as the result to the tort.

Medical Costs

Future medical expenses are calculated by medical-cost specialists. They make charts referred to as life-care plans, showing what the plaintiff will need for future medical care. This element of damages is, of course, strongly affected by life expectancy in instances where the injury is permanent. Examples of future medical costs include therapy, medical supplies, special education needs and special housing and transportation needs.

Ryan Smith

In Ryan's case, life expectancy given his injury is a key factor in the extent of damages. If it is close to the average expectancy for 14-year-old males, chances are his future medical costs will be significant. In fact, most very large injury verdicts involve significant medical costs.

Beth Smith

Beth Smith's medical costs would likely be limited to past medical bills, plus whatever might be needed in the future. Although her injuries were mild, there might be evidence that her injury may have some lingering effect. A source for this element of loss would be testimony by a medical expert.

Tom Smith

Tom Smith's medical expenses attributable to the accident are recoverable by his estate.

Household Services

Household services are the value of services provided by a plaintiff or decedent for the benefit of other family members. Sources for the amount of household services rendered and their value include government and academic studies and the cost of services from commercial providers. Note that household-services damages should be limited in duration by joint-life expectancy and healthy-life expectancy.

Beth Smith

Beth has lost her husband's services. He might have performed such tasks as landscaping or certain types of home repair. If so, the loss is compensable and can be valued by determining replacement cost of such services. Key factors for discovery include the type and amount of services Roger provided. How many hours a week did he work around the house? This can be determined through deposition or by consulting various surveys that track the average amount of time married males spend on household tasks.

Renee Smith

Like Beth Smith, Renee Smith has lost the services of her husband. The extent of loss could be determined via deposition inquiry into how many hours Tom Smith worked on household chores. Being retired, he might have made significant contributions to household maintenance, making this a significant element of loss.

Maintenance

The decedents' probable personal living expenses would not be available to the surviving family members if the accident had not occurred. Any recovery by the surviving family members must take this into account. Therefore, the likely living expenses of the decedents is a key issue in determining damages to the surviving family members.

Sources for personal-maintenance values include depositions of family members on the decedent's expenditures, checking-account records, tax records, Census data and other statistical data.

Guidance on Damages Discovery

Damages to any individual in any injury matter are unique to that individual, and every damages claim deserves close scrutiny. Because the components of any damages claim involve several interlocking variables, thorough discovery is necessary to determine the extent of actual damages.

Insufficient discovery can lead to significant under- or over-valuation of claims, and a poorly prepared damages argument can also affect credibility on other issues involved in the litigation. The help of a competent economist ' retained early in the case-preparation process ' can ensure that no facet of discovery is overlooked.

Useful Documents for Damages Discovery

Tax documents / returns

1099s

W-2s

1040s

Schedule C

Lifetime earnings information from the Social Security Administration

Fringe-benefit documents

Pension plan

Health plan

Employer-paid insurance policies

Employee handbook

Decedent's or claimant's resume

Past and present collective-bargaining documents

Pay stubs

Bank-account records (checking and savings)

Chad L. Staller, J.D., M.B.A., M.A.C., a member of this newsletter's Board of Editors, is president and senior economist at the Center for Forensic Economic Studies, a Philadelphia-based firm providing economic and statistical analysis and testimony. He can be reached at 215-5460-5600 or [email protected]. More information on the Center: www.cfes.com.