News from the ATLA Mid-Winter Convention
I am still recovering from the jet lag of an eleven-hour nonstop flight from Honolulu to Newark this past Thursday. For the past week, I attended the Association of Trial Lawyers of America‘s (ATLA) mid-winter national convention in Honolulu, Hawaii. While the weather was certainly warmer than it was here in New jersey, a great deal of work nevertheless was accomplished. Last Friday afternoon, I attended the winter meeting of the Academy of Catastrophic Injury Attorneys, which is an invitation-only organization comprising of America’s top trial attorneys. Sunday found me in an afternoon meeting of the Board of Trustees of the National College of Advocacy, which sponsors, organizes and runs all of the Association’s national legal education programs throughout the year. At the meeting, we reviewed the upcoming educational program including the seminar on trucking accidents which I have been invited to chair. Plans were finalized for this July’s national convention’s education program which will be held in Seattle, Washington. ATLA’s upcoming educational programs can be found here. Finally, on Wednesday morning, I gave my invited lecture on economic damages in personal injury cases. The presentation was entitled Discounting to Present Value: Does There Have to be a Reduction?
When presenting future economic damages in a personal injury case, a vocational/economic expert is required. Under the law of New Jersey and in many states, those future economic losses must be converted to present value. What that means, is that the expert must account for the rate of return (interest rate) of the investment in the future while at the same time compensating for the effect of growth in compensation (inflation). The difference between the interest rate and the inflation rate is known as the rate of discount. Depending on the specific rate of either compensation growth and interest, that rate can result in a net positive discount or a net negative discount. Unfortunately for injured victims, some economic experts, using a historical approach, that is looking back over the past ten, twenty or fifty years, utilize a net positive discount rate which has the effect of reducing an injured individual’s future economic loss. My presentation discussed the pitfalls and error in utilizing a net positive discount rate, instead urging experts to utilize a total offset. The total offset method is based on the opinion that the rate of compensation growth (inflation) and the rate of investment (the interest rate) will be equal and will therefore offset each other.
I was pleased that my presentation was so well received by the hundreds of attorneys in attendance.