This cross examination discussion is from my cross examination notes in a survival action economic loss case.

Forensic Economist. Agree you develop estimates for numerous variables that affect the recovery in tort cases. Agree in a survival action these variables are: 1) Base Earnings; 2) Earnings Growth Rate; 3) Fringe Benefits; 4)  Personal Consumption; and 5) Discount Rate.

Base Earnings Rate. Defense forensic economists will start as low as possible. When they begin too low cover how the low base rate was arrived at and why a low base rate will lead to a lower economic loss amount. Demonstrate the rate of pay at which the economist should have started.

Earnings Growth Rate. Another way the defense economist can understate economic damages is through the “earnings growth rate.” Earnings do not grow in a linear manner until retirement. Typically they peak about ten years before retirement. Here time must be spent with our economist to determine and understand a fair economic growth rate. When the defense economist fails to do this and understates the growth rate demonstrate in cross examination this leads to an understatement of economic damages.

Fringe Benefits. The defense economist will start with a low base income rate and fail to add fringe benefits. “Data from the last few decades reveals that fringe benefits have increased significantly as a percentage of overall compensation. These benefits now account for almost 30%… of total compensation. ,,, Damage calculations must therefore include a valuation of fringe benefits.” David Gordon, A Forensic Economics Primer (Journal of Comprehensive Research).

Consumption. The defense economist may try to overstate personal consumption. This is because the amount of personal consumption is deducted from lifetime earnings before the discount rate is used to arrive at net economic loss. Future earnings of the deceased are adjusted for his consumption. See id. at 44-45. Consumption covers expenditures on goods and services, but does not include joint family expenditures. When possible the economist will look to actual expenses, but this does not work in the case of a young decedent. Have an understanding of how your economist is addressing personal consumption, and make sure it is solid. Hold the defendant economist to a similar analysis to prevent getting away with overstating consumption which results in understating net economic loss.

Discount Rate. The United States Supreme Court in Jones & Laughlin Steel Corp. v. Pfeifer, 462 U.S. 523 (1983) addressed the issue of the proper discount rate in a personal injury case involving future economic loss. The Court reasoned in all personal injury cases involving future economic loss “it is reasonable to suppose that interest may safely be earned upon the amount that is awarded. Id. at 537. Thus, the ascertained future benefits should be discounted. The Court pointed out the discount rate should be one earned on the best and safest investments. Id. The injured plaintiff is “entitled to a risk-free stream of future income to replace his lost wages; therefore, the discount rate should not reflect the market’s premium for investors who are willing to accept some risk of default.” Id. The Court concluded the amount of future economic loss must encompass the amount the injured plaintiff would have earned during each year he could have worked but for his injury and the appropriate discount rate “reflecting the safest available investment.” Id. at 538. Have  the Jones case when cross examining the defense economic expert. This is because the defense expert will likely use a high discount rate arrived at at least partially from stock market return rates. Remember, the higher the discount rate the lower the net economic loss amount. The use of the high discount rate deflates economic loss contrary to our Supreme Court.

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 Cross examination is a challenging part of the trial.  It presents the opportunity to either turn an adverse witness into my witness or destroy the adverse witness. Either way my case benefits form successful cross examination.

My preference is to turn the witness into my witness. On destroying the adverse witness I do this in a way the jury will accept. I never embarrass, badger, or abuse a witness.

One of my favorite cross examination movie scenes is Charles Laughton in Witness for the Prosecution.  As we see from viewing this short but sweet cross, Laughton is able to destroy a fact witness in a way acceptable to the jury. He uses the classic inability to perceive facts to destroy the witness.

As we see in the clip Laughton begins by setting the foundation for inability to hear (and hearing a conversation is the basis for the adverse testimony). In setting the foundation Laughton begins by asking the witness in a booming voice if she recently applied for a hearing aid. In doing this Laughton uses change of voice (going into a less audible voice) to dramatically illustrate the witness’s hearing problem. When the prosecutor objects Laughton unfazed agrees to repeat the question.

In a booming voice Laughton restates his question with the witness admitting she has yet to receive her hearing aide. Continuing in his booming voice Laughton verbally summarizes the witness’s testimony. In doing this he paints the scene within which the witness is supposed to have heard a conversation that could not be heard by a person with poor hearing. Then by again lowering his voice Laughton demonstrates the witness’s inability to hear as she again cannot hear Laughton’s lowered voice. The damage is done. The witness is destroyed without being embarrassed, badgered or abused.

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