Does your client's disability rating = earning capacity loss?

Maybe, Maybe not. Like most personal injury cases, it depends on the injury.

The key to establishing the presence of an earning capacity disability is (are) the functional limitations that have been imposed on an individual as a result of a permanent impairment. In otherwords, for some persons a 25% whole body impairment may result in a greater than 25% loss of earnings capacity. For other injuried individuals, the loss in earnings capacity may be less.

Functional limitations may preclude someone from performing the functional exertional demands of certain kinds of jobs, thus establishing a loss of earning capacity.
In most instances, there is no direct one to one correlation between permanent impairment and loss of earning capacity aside from the perception that for purposes of general damages one might argue that the higher the percentage of permanent impairment, the greater the loss of earning capacity.

Present value approach from an attorney's perspective

For a great presentation on the calculation of economic damages and using present value techniques, go to braininjurylawblog.com.

The seminar which was titled, Discounting to Present Value: Does Their Have to be a Reduction?, was presented at the 2005 ATLA annual meeting. On the braininjurylawblog.com there is both a pdf of the slides and a podcast of the presentation. (http://www.braininjurylawblog.com/podcasts-255-discounting-to-present-value-does-their-have-to-be-a-reduction.html)

The attorney strongly challenges economists who do NOT use the total offset method. It was quite thought provoking.

The attorney, Bruce Stern of Stark & Stark ( http://www.braininjurylawblog.com/), argues that economist should NOT use a net positive discount factor because among other things future inflation can not be reliably forecasted.

An update of the value of life

Kip Viscusi, an economist at Harvard, has published an new updated report on his ground breaking work on the value of life. He finds:

The value of a statistical (VSL) to be about $7 million for U.S. workers. International evidence often indicates a lower VSL, which is consistent with the lower income levels in less developed countries. Canadian workers have a VSL equal to about $4.2 million.

Click here for the full report