The untimely loss of a loved one is hard enough. It can be more difficult if the deceased is a breadwinner. The surviving family members will not only suffer emotionally. Financial matters also become a pressing concern.
But what if the deceased suffered a wrongful death? Family members may be able to secure compensation. This can account for the potential earnings the victim would have contributed. However, it is not easy to calculate damages. This is when a forensic economist steps in.
What is forensic economics?
Forensic economics, as defined by the National Association of Forensic Economics (NAFE), is a scientific discipline that brings together economics and the legal system. It goes beyond mere calculations. It covers a wide range of essential applications in legal proceedings. One example is in calculating economic damages from injury and death.
Calculating damages
Economic damages in wrongful death cases refer to the replacement value of life. It encompasses various elements such as:
- Loss of earning capacity which covers personal consumption and maintenance
- Loss of fringe benefits such as paid leave, health insurance and retirement plans
- Lost production of household services
- Medical bills
- Discounting of losses to present value
Forensic economists use principles and methodologies to provide expert analysis and evaluations of these elements. They analyze financial data and consider various factors to estimate the potential future earnings of the deceased. They may investigate earnings history, statistical studies, Bureau of Labor Statistics reports and expert opinions.
Beyond financial damages
Forensic economists also assess the broader economic impact resulting from the loss. They may also consider the deceased individual’s role as a caregiver or provider of emotional support. These intangible aspects are often overlooked. But these hold a significant value that a forensic economist may be able to quantify.
Let us take the example of a parent who died due to medical malpractice. The forensic economist will estimate the loss of income. But they may also calculate the value of the nurturing and guidance the parent would have provided their children. These add to the value of compensation that the family may receive.
Forensic economists are crucial in strengthening wrongful death cases. They provide a comprehensive assessment of the potential earnings and broader implications of the loss. This ensures that the surviving family members receive the compensation they deserve.