Forensic Economics Case Studies

Personal Injury - Construction Accident

Background: A 42-year-old construction foreman suffered permanent spinal injuries after a scaffolding collapse. The plaintiff had 23 years remaining in his work-life expectancy and was unable to return to his previous occupation or any comparable position requiring physical labor.

Analysis: Calculated lost earnings capacity by comparing pre-injury earnings trajectory to post-injury earning potential in sedentary occupations. Analyzed union wage scales, overtime patterns, and fringe benefits including pension contributions and health insurance. Projected future medical costs and life care needs based on physician recommendations.

Challenges: The plaintiff had variable income due to seasonal work patterns and project-based overtime. Additionally, determining appropriate vocational alternatives required extensive analysis of transferable skills and local labor market conditions. The defense argued for higher mitigation earnings based on theoretical desk jobs.

Outcome: Economic analysis supported $3.2 million in lost earnings and $1.8 million in future medical costs. Case settled for $4.5 million after mediation, with the forensic economic report serving as the foundation for settlement negotiations.

Medical Malpractice - Birth Injury

Background: An infant suffered severe brain damage due to oxygen deprivation during delivery, resulting in cerebral palsy and cognitive impairments. The child requires lifetime care, specialized equipment, and will never achieve independent living or employment.

Analysis: Developed comprehensive life care plan costs including medical care, therapy, medications, adaptive equipment, home modifications, and 24/7 attendant care through life expectancy. Calculated lost earning capacity based on statistical earnings for individuals without disabilities. Incorporated inflation factors specific to medical costs versus general inflation.

Challenges: Projecting 70+ years of future care costs required careful analysis of medical inflation trends and evolving care standards. The defense disputed the level of required care and argued for institutional rather than home-based care. Life expectancy reduction factors were heavily contested.

Outcome: Total economic damages calculated at $18.5 million present value. Jury awarded $22 million including non-economic damages, with structured settlement annuity established to ensure lifetime care funding.

Employment Discrimination - Wrongful Termination

Background: A 55-year-old female executive was terminated after reporting sexual harassment and replaced by a younger male colleague. She had 25 years with the company and was on track for senior leadership positions before termination.

Analysis: Quantified back pay losses including salary, bonuses, stock options, and deferred compensation. Projected front pay damages considering age-related hiring difficulties and industry-specific barriers to reemployment at comparable levels. Analyzed pension losses and unvested equity forfeitures.

Challenges: The plaintiff's high compensation level and specialized industry niche limited comparable positions. Mitigation efforts were complicated by non-compete agreements and reputational damage within a small professional community. The defense argued she failed to adequately search for employment.

Outcome: Economic report demonstrated $2.8 million in past and future losses. Case settled for undisclosed amount during trial, with economic testimony establishing the foundation for seven-figure settlement.

Commercial Damages - Business Interruption

Background: A manufacturing company suffered major losses when a key supplier breached an exclusive supply contract, forcing production shutdown for six months. The breach occurred during peak season, causing lost sales, customer defections, and market share erosion.

Analysis: Calculated lost profits using "before and after" and "yardstick" methodologies, comparing actual performance to projected performance absent the breach. Analyzed fixed cost absorption, variable cost savings, and incremental expenses to restart operations. Quantified permanent market share losses and diminished business value.

Challenges: Separating breach-related losses from general market conditions required extensive industry analysis. The defendant argued that alternative suppliers were available and that some customers would have been lost regardless. Proving causation for long-term market share impacts required sophisticated econometric modeling.

Outcome: Economic analysis established $8.2 million in lost profits and $3.5 million in business value diminution. Arbitration panel awarded $9.8 million based largely on the forensic economic evidence presented.