Insights are shorter articles on the questions that recur in economic damages work: what a damages report contains, how expert testimony on damages is admitted, and how valuation and forensic accounting evidence is built and tested. They are written by the economists at KW Economics for attorneys on both sides of a damages claim.
Articles
Daubert vs. Frye: Admissibility Frameworks for Economic Damages Testimony - Legal, . Daubert and Frye are the two framework families that govern expert testimony in U.S. courts: Daubert asks whether a method is reliable and reliably applied, and Frye asks whether it is generally accepted in the field. Neither framework routinely excludes forensic economic testimony; challenges target inputs the record does not support.
Components of an Economic Damages Report - Economics, . An economic damages report is a set of schedules connected by stated assumptions. This post walks through the components in the order they appear in a well-organized report, what each one rests on, and where opposing economists usually disagree, so counsel can read a report critically in an hour.
What a W-2 Adds to a Lost Earnings Claim - Records, . The W-2 is the first record an economist asks for in a lost earnings claim, because it fixes what an employer actually paid a person in a year, and it says more than the wage figure most readers stop at. This post explains what each box adds to the earnings base, what the form cannot tell you, and which records fill the gaps.
What Tax Returns Add to a Lost Earnings Claim - Records, . The tax return is the one record that shows all of a person's income in a year, from every employer and every business, alongside the income of a spouse and the deductions that reveal how a business was run. This post explains what each part of the return adds to the earnings base, where it misleads, and which records it points to next.
What Pay Stubs Add to a Lost Earnings Claim - Records, . The pay stub is the only record that shows how a year's wages were earned: the rate, the hours, the overtime and premium pay, the raise and its date, and the deductions that reveal which benefits the person carried. This post explains what each part of the stub adds to the earnings base, where it misleads, and which records it points to next.
What Union Contracts Add to a Lost Earnings Claim - Records, . For a union member, the collective bargaining agreement is the one record that states in advance what the person would have been paid: the wage scale and its scheduled increases, the steps and the seniority that drive them, the overtime and shift premiums, and the employer's contributions to health, pension, and annuity funds. This post explains what each article of the contract adds to the earnings projection, what the contract cannot show, and which records it points to next.
What Benefit Summaries Add to a Lost Earnings Claim - Records, . The benefits summary an employer hands a new hire, and the summary plan descriptions and annual statements behind it, are the records that show what coverage the person actually had and what the employer paid to provide it: the health plan and the share of the premium the employer carried, the retirement plan and its matching or contribution formula, the vesting schedule, the life and disability coverage, and the paid leave. This post explains what each part of the package adds to the fringe benefit component of a lost earnings claim, what the summaries cannot show, and which records they point to next.
What Intercompany Agreements Add to a Transfer Pricing Dispute - Records, . The intercompany agreement is the record that states what one company in a group agreed to provide another, at what price, and which of them was to bear which risks: the license and its scope, the distribution or manufacturing arrangement, the services and the costs they are charged from, the loan and its terms, and any clause that resets the price after the year ends. This post explains what each part of an agreement adds to a transfer pricing dispute, how the agreement is tested against what the companies actually did, what it cannot show, and which records it points to next.
What License Agreements Add to an Intellectual Property Damages Claim - Records, . A license agreement is the record of what someone actually agreed to pay for the right to use a patent, a trade secret, a trademark, or a copyrighted work: the rights granted, the royalty and the base it applies to, any lump sum, and the terms that changed the price. This post explains what each part of a license adds to an intellectual property damages claim, how a license is tested for comparability with the hypothetical license the claim requires, what it cannot show, and which records it points to next.
What Business Tax Returns Add to a Lost Profits Claim - Records, . The return a business files each year is the one financial record prepared under penalty for a reader with no interest in making the business look good, and in a lost profits claim it is the record against which the financial statements, the projections, and the owner's account of the business are all tested. This post explains what each part of the return adds to the claim, where the tax figures differ from the economic ones, and which records the return points to next.
What the General Ledger Adds to a Lost Profits Claim - Records, . The general ledger is the record of every transaction a business posted, by date, account, and amount, and it is the one record from which the financial statements and the tax returns were both built. In a lost profits claim it is where the economist goes to test the annual figures, to find the month the loss began, to isolate the part of the business the dispute concerns, and to see what was changed after the fact. This post explains what the ledger adds, what it cannot show, and which records to produce with it.
What Bank Statements Add to an Economic Damages Claim - Records, . A bank statement is the record of what actually moved: every deposit, withdrawal, transfer, and payment, dated and in an amount, kept by a third party with no stake in the dispute. In a lost earnings claim it corroborates income the forms do not show, in a lost profits claim it tests the ledger and the return against the cash, in a tracing engagement it is the trail itself, and in a divorce it shows the spending the stated income has to explain. This post explains what the statements add to each, what they cannot show, and which records to produce with them.