Page 20 - NC Triangle Vol 7 No 2

DR. ANDREW BROD | Forensic Economics
The Life Cycle in Forensic Economics
Forensic economics covers a lot of ground but usually focuses on the projection of economic
damages: lost pro t in commercial cases and lost income in personal in- jury and wrongful-death cases.
In claims by individuals, economic damages can be incurred at various stages in the life cycle, from child- hood to marriage to retirement. Here are some examples.
CHILD DECEDENTS
Cases involving deceased children are heartbreaking, but they are a unique challenge to the forensic econ- omist: how should economic damages be framed? If the estate bene ciaries are the parents, what’s their economic loss from the death of a child? North Carolina law is relatively strict on this point and requires strong evidence of a link between the child’s projected future income and the portion of it that would have owed to the parents.
In one case, the parents of the de- ceased child were undocumented migrant workers. But the decedent’s younger sister was an American citi- zen, and my client, the attorney for the family, did something clever and de ned the little sister as the estate bene ciary. e attorney then hired a cultural expert with deep experience in the family’s ethnic community to advise me regarding the likely nan- cial assistance the decedent would have provided to the sister.
ALIENATION OF AFFECTION
Divorce is en- demic in American society, but North Carolina case law adds a twist to it. If someone outside
of a marriage commits wrongful acts that deprive a person of the love and a ection of his or her spouse, that person can sue the outsider for alien- ation of a ection.
e rst time I was contacted about an alienation case, I couldn’t see how an economic analysis would be rel- evant. However, the attorney noted that because the plainti ’s husband was gone, the plainti could no lon- ger bene t from his income. It was as if he’d died. I took the case and did the equivalent of a wrongful-death analy- sis, which is how I’ve framed my work on alienation cases since then.
CHILD SUPPORT
In another case, a mother received a nancial settlement a er the death of her college-age son. e boy’s absen- tee father then sued for a share of the settlement, which the mother felt he didn’t deserve. I was engaged not to opine about who deserved what but to provide context regarding the father’s payment of child support over the years. I compared his total payments with the U.S. Department of Agricul- ture’s estimate of the cost of raising a child. e former was much smaller than the latter, which presumably bol- stered the mother’s argument.
#METOO
e U.S. Equal Employment Op- portunity Commission reported that the number of complaints for sexual harassment increased sharply last year as a result of the emergence of the #Metoo movement. It was only a year earlier, in 2017, when allega- tions of sexual misconduct by movie mogul Harvey Weinstein were made public, opening a oodgate of allega- tions against public gures around
the country.
Attorneys in North Carolina have
also seen a rise in sexual-harassment lawsuits, and they o en to look to forensic economists to determine damages. According to Durham em- ployment attorney Michael Korn- bluth, those damages could include lost earnings, lost bene ts, and com- pensation for emotional distress and other health problems.
RETIREE BENEFITS
When a deceased party was work- ing at the time of his or her death, the standard practice is to place a value on retirement bene ts on the front end. at is, one tracks the value of the employer’s contribution to those bene ts. But when a retiree dies and is receiving a pension, that approach won’t work. A retiree on a pension would have continued to receive pay- ments for the rest of his or her life. So, for a retiree, one tracks pension pay- outs, cost-of-living adjustments, and so on.
One of the uncomfortable reali- ties of cases involving retirees is that economic damages tend to be rather small. I presume this is frustrating for the relatives. But as an economist, I can’t address the totality of damages resulting from the death of an older person any more than I can do so for a child. All I can do is stick to the numbers and calculate the economic damages.
A good forensic economist treats every such calculation like a math problem.Buttheseareveryimportant math problems, so whether I’m work- ing for the plainti or the defendant and regardless of where the problem occurs in the life cycle, it’s important to get the numbers right.
Dr. Andrew Brod is a senior research fellow in the Bryan School of Business and Economics at The University of North Carolina at Greensboro. Dr. Brod holds a doctorate in economics from the University of Minnesota and did his undergraduate work at the University of Illinois. His research interests include industrial and environmental economics, regional economic development, and the home furnishings industry. Dr. Brod has worked as a forensic economist for more than 20 years and is a member of the National Association of Forensic Economics. Learn more about him at www.AndrewBrod.com.
ATTORNEY AT LAW MAGAZINE · NORTH CAROLINA TRIANGLE. 7 NO. 2 20