Lost earnings analysis applied to medical malpractice litigation: methodology, deliverables, and case-specific considerations.
In a medical malpractice matter the lost earnings claim is measured against the outcome the patient would have had with proper care, not against perfect health. The economist takes the causation and prognosis opinions in the record as the baseline, states the but-for earnings path they support, and builds the injured path from actual post-injury earnings and the work-capacity opinions. The loss is the difference between the two paths, projected over the applicable worklife with growth and discounted to present value. Where the underlying condition would have limited work on its own, the apportionment between the injury and the condition is usually the assumption that most changes the total.
Past and future lost earnings and fringe benefits for a person whose injury has removed them from work or reduced what they can earn. The analysis builds from the earnings history, projects the but-for path over the person's expected worklife with wage growth, and discounts the future stream to present value. When the person can still work in a reduced capacity, the loss is framed as diminished earning capacity, with the post-injury path drawn from a vocational opinion or the treating record and offset against the but-for projection.
The claim consists of lost earnings and earning capacity attributable to the injury, lost fringe benefits, the replacement cost of household services the patient can no longer perform, the present value of the incremental future care documented in a life care plan or the treating recommendations, and, where the patient has died, the survivor and estate components of a wrongful death analysis. The records that drive the analysis are the earnings and benefit history, the medical opinions that separate the injury from the underlying condition, and the care plan that distinguishes incremental care from the care the underlying condition would have required.
We issue the final report in disclosure-ready form and provide deposition and trial testimony, rebuttal of opposing economic opinions, and updated calculations as new records arrive.
The economist does not decide what the condition would have done; the medical opinions do. The report takes those opinions as its baseline, builds the but-for path from them, and measures only the loss the injury added. When the opinions differ, the report shows the result under each.
Once causation and prognosis opinions are available and the disclosure schedule is known. The earnings analysis can begin from the financial records while the medical opinions are finalized, and the report is completed once the but-for path is defined.
Request a consultation on Lost Earnings or call (201) 343-0700. Plaintiff and defense counsel.