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Litigation Services Handbook: The Role of the Financial Expert, 5th Edition by David P. Hoffman, Daniel G. Lentz, Roman L. Weil

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Chapter 12

Lost Earnings of Persons*

Daniel G. LentzElizabeth B. Sandza

12.1 Introduction

In personal injury, wrongful termination, wrongful death, medical malpractice, and similar tort cases, the law allows the plaintiff compensation for economic loss when the court finds the defendant liable. The economic loss can include many types of loss that the plaintiff suffers (e.g., medical bills) but the plaintiff or decedent's lost earnings usually become the primary component of claimed economic damages. Lost earnings represent the monetary loss, in present-value dollars, stemming from the individual's inability to provide certain services or the ability to provide them only for reduced compensation.

12.2 Information Needed for Analysis

Before preparing an analysis of lost earnings, the financial expert will need to obtain case-specific information and relevant statistical data from various reference sources.

(a) Data Specific to the Case

Data specific to the case include personal data, employment and earnings data, and health data.

(i) Personal Data

Making case-specific use of governmental statistical data requires the plaintiff's or decedent's personal information, such as age, gender, race, and educational level. Practitioners use the date of birth to estimate the statistical dates of retirement and death from work-life and life expectancy tables. In wrongful death cases, the dates of birth and health conditions of all immediate family members and the decedent's marital status ...

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