PRoducts & Services

Forensic Economics - Areas of Specialization

The following subject areas reflect the company's specialization in providing forensic economic evidence in civil litigation.  BEC's experts have testified on each topic. Papers related to each topic are listed under the subject heading, and are detailed in the Research and Publications menu.

Personal Injury - Adults

These assessments involve identifying career paths before and after an accident or medical mishap and attempting to discern the impact of disability or health setback on earnings and/or earning capacity. Some of the more complicated issues arising in such evaluations include:
  • loss of income due to sexual assault;
    • Brown, C.L (2005) "Damages in sexual assault cases" CBA - National Civil Litigation CLE Conference held in Toronto ON, April 2005
    • Brown, C.L (2003) "Trends and Unusual Claims" APTLA - Developing Damages Trends held in Moncton NB, May 2003
    • Brown, C.L (2003) "Unusual Economic Claims" CBA - Alberta Law Conference held in Edmonton, AB, March 2003
    • Brown, C.L (2001) "Estimating the Impact of Disability on Employment" NAFE / WEAI Annual 76th Conference held in San Franciso, USA, Jujy 2001
  • the impact of disability on employment and income;
  • the impact of reduced capacity for work, especially in the case of reduced billing time for professionals (e.g. lawyers, doctors and dentists);
  • assessing "lost opportunities" in the future;
  • predicting success in celebrity careers, as in the case of professional athletes, dancers, models, actors or comedians;
  • considering financial statements for the self employed;
    • Brown, C.L. (1998) "Dicey Future Income Loss Claims: Part 2. Income Losses for the Self-Employed"; Lexpert - "Impeaching Credibility in High-Risk Personal Injury Claims" held in Calgary AB, October 1998
  • assessing farming income losses;
  • loss of pension benefits for plaintiffs near retirement, especially in the case of nurses, teachers or union members;
  • evaluating types of injury on earnings eg. brain injury, visual impairment, or SCI injury;
    • Brown, C.L. (2000) "The Impact of Brain Injury on Education, Training, and Employment Using Statistics Canada's HALS Data", Canadian Coalition & Pacific Coast Brain Injury Conference - National Conference on Brain Injury held in Vancouver BC, November 2000
    • Brown, C.L. (1999) "Rehabilitation, Wage Loss and Future Care Costs", Lexpert - Difficult Spinal Cord & Nerve Damage Injury Claims held in Calgary AB, October 1999
  • assessing "loss of earnings capacity" using HALS/PALS research;
    • Brown, C.L. (2005) "Computing the Damages: How Much Will This Case Cost You?", Canadian Institute - Auto Insurance Claims Litigation held in Calgary Alberta, September 2005
    • Brown, C.L. (2001) "Sexual Assault and Effect on Income; "Estimating the Impact of Disability on Employment (HALS)"; "The Female-Male Earnings Gap: Starting Salary Offers for College Graduates" (discussant); "Roundtable on American/Canadian Forensic Practice (panelist)", NAFE - Western Economic Association International - 76th Annual Conference held in San Francisco CA, July 2001
    • Brown, C.L. (2001) "Loss of Earning Capacity: When to Claim It and When Do You Need an Expert to Prove It? (HALS)", Canadian Bar Association (Southern Alberta Branch), Personal Injury Sub-Section held in Calgary AB, January 2001
    • Brown, C.L. (2000) "The Impact of Brain Injury on Education, Training, and Employment Using Statistics Canada's HALS Data", Canadian Coalition & Pacific Coast Brain Injury Conference - National Conference on Brain Injury held in Vancouver BC, November 2000
    • Brown, C.L. (1996) "Loss of housekeeping capacity"; "1991 HALS", Canadian Bar Association (Southern Alberta Branch), Personal Injury Sub-Section held in Calgary AB, May 1996

Personal Injury - Children & Young Adults

Evaluating the impact of injury or illness on children or young adults in future careers is done without the benefit of work history in the labour market. Parental and sibling education levels are used to predict earnings by general educational attainment, in addition to other factors . A Family Profile Form is a helpful aid.

Wrongful Death (Fatal Accidents Act)

Although predicting the deceased's income profile is similar to the work done by economists in personal injury cases involving adults, several facets are unique to wrongful death cases. The aspects of a wrongful death case requiring particular attention include: In addition, cases where orphaned children survive the death of a single parent or when both parents' lives are claimed in an accident or misfortune, the costs of raising children must be considered instead of the usual methodologies for dependency loss approach.

"Duncan" Estate Claims (Survival of Actions Act)

The Court of Appeal decision in Duncan v. Baddeley in 2000 means that the claim by an estate for the deceased's earning capacity survives the deceased and is to be made without regard to the beneficiaries (if any). This involves a hybrid calculation whereby taxes and other deductions are taken into account (as in wrongful death claims under the Fatal Accidents Act) but a "lost years" deduction is employed instead of personal consumption rates for the deceased and dependency rates for the survivor(s). This calculation survives only to accidents until Nov. 1 2002, at which time Alberta legislation barred it. Most other provinces and territories bar this claim, either by explicit legislation or common law.

Loss of Housekeeping Capacity

When an injury prevents a claimant from doing his/her job, or prompts retraining, there may be a permanent partial disability that prevents him or her from doing household work as well. Alternatively, if the plaintiff can resume work full-time, then it can be the case that he/she invests all of his/her time and energy into paid work, and cannot resume pre-accident household chores. In these cases, BEC relies upon a form completed by the plaintiff (Diary of Household Activities ([personal injury] or [fatal accident]) or a report from an occupational therapist on cost of care to assess the value of time he/she can no longer devote to chores done before the accident.

Cost of Care

In some cases, an occupational therapist will recommend items or services for a plaintiff for their health care or living standards. We have no opinion as to the necessity of these items; our role is simply translating the occupational therapist's recommendations (which deal only with first-time costs or annual costs) into lifetime costs for the plaintiff, discounted to present value. To do so, we provide a table that lists all of the assumptions underlying the calculations (frequency of duration, starting age, etc.) and which allows easy negotiation if the cost of an item is changed or deleted.

Tax Gross-up

Claimants will have to pay tax on the investment income they may earn on a loss of dependency award or cost of care/household services award (because we assume they will invest these awards at the interest rate(s) equal to the discount rate assumed). To ensure that the claimant's award is not eroded by the amount of tax on the investment income generated by the cost of care/household services award, a tax gross-up is calculated. To do so, the claimant's income sources post-accident are taken into account, as is the investment income on the loss of income award (though no gross-up is calculated on the tax accruing to this portion of investment income because we use gross, before-tax figures to calculate loss of income awards, which implicitly includes a "gross-up"). Tax gross-up on loss of income claims can also be calculated in jurisdictions which use after-tax income as the basis - in Ontario, from 1996 to 2003; and in Alberta after Jan 26, 2004.

Loss of Disability Income

In many cases involving claimants on long-term disability, disputes arise as to the payment of disability income. BEC has done many assessments that quantify lump-sum payments based on the stream of monthly disability benefits, depending on COLA clauses and the interpretation of offsetting income sources.

Wrongful Dismissal

Quantifying lost wages during various severance periods is less complicated than evaluating the out-of-pocket costs for benefits purchased when unemployed without the advantage of a group plan. Assessing reduced pension entitlements upon retirement can be important as well. In addition, BEC has provided many statistics related to the possibility of mitigating employment during severance terms.


Loss of pension benefits

When claimants are near retirement age, and belonged to a specific pension plan from which a certain pension income stream would be paid upon retirement, forensic economists can value the loss of this benefit separately by estimating the annual pension (taking into account actuarial reductions); potential retirement ages on an unreduced basis or at full pension; cost-of-living increases, which affect the discount rate used (based on Canadian Institute of Actuary recommendations on interest rates); and saved contributions.


Loss of Insurability

A claim for "loss of insurability" involves proving that the impairment in question makes it more difficult (or impossible) for the claimant to obtain disability or life insurance, and as such invites statistics regarding the enhanced possibility of re-injury that justifies the need for insurance after the incident in question. Calculating the loss would involve comparing the difference between the group and individual policy premiums and calculating the present value of the monthly premiums over the person's working life expectancy. The premiums are already discounted for the probability that the insurer will have to pay out the face value of the policy, i.e., that the insured would have become disabled and would have collected the benefits. Return of premium riders have to be considered if inherent in the policy.