It’s been estimated that 40 million lawsuits are filed every year in the U.S, and an economist expert can play an important role in many of them. Complex cases that involve economic harm or damages often rely on testimony provided by them to support liability when it comes to everything from loss of wages due to an absence from work to the expenses of an accident and determines a dollar amount of a negative impact to the quality of life.
These are just some of the ways economists can help in a variety of legal cases such as these.
Economist experts often appear in car accident cases, serving as expert witnesses to help the jury or judge understand the full extent of damages involved. They can be instrumental in developing a case theory for cases that involve monetary damages. For example, in an accident that left a professional guitarist unable to use his or her hands, the expert can testify on the loss of the individual’s earnings over their lifetime. Without the ability to prove this devastating financial damage, a personal injury lawsuit would be pointless.
Economists can also help the jury understand how damages can fluctuate over time, with taxes, inflation, productivity, expected duration of loss, the time value of money, and life expectancy. The expert paints a long-term picture of monetary damage to ensure a fair ruling.
Economists can also play an important part in work injury cases. For example, a 30-year-old male wage earner is significantly injured on the job to the point where he or she can’t work. There may be a number of types of damages available, including compensation for future lost wages, which refers to the money he would have earned throughout his working life if it wasn’t for an error or other wrongdoing of the company or one of its employees.
The economist will receive information about the injured person’s wages and benefits, age, skill set, and education level. This expert is trained to take that data and determine the amount the injured person would have earned, including any benefits, if they had worked for a certain number of additional years. They’ll factor in inflation, cost of living adjustments, and likely raises to come up with the numbers. At that point, the expert can present the jury with a figure representing the amount of money today that would compensate the plaintiff for the earnings they would have received if they’d been able to keep working.
Corporate Financial Disputes
Economists can also provide expert testimony on complex financial disputes involving corporations. In a business dispute, they can also review and testify on the company’s internal data, including assets and liabilities, economic conditions, markets, and past and future outcomes. When an expert economist with strong business acumen and impressive educational credentials testifies, it brings significant validity and authority to the plaintiff’s argument. Whether the dispute involves investor groups or individual shareholders, having an economist provides a factual valuation can be crucial for determining fair value. If intellectual property rights were infringed upon, the expertise of an economist is important for defining lost profits and providing a fact-based analysis of economic damages.