23 Feb Litigation Support
Valuation of economic loss; Valuation of care costs; Statistical and probability studies; Population modelling and process.
Litigants often need to determine the value of damages that they have suffered. These damages include loss of income, the cost of rectification and the cost of subsequent care. The practice assists litigants, their solicitors and barrister in matters relating to personal injury and commercial disputes to quantify these damages.
The practice’s services in this area are normally provided to solicitors but are also provided directly to litigants and their barristers. Generally these services culminate in a report attached to a statutory declaration and attendance at court is not necessary, although this is done if required. These services include: –
- Valuation and certification of economic losses- the practice performs valuations of lost income from salaries, wages and superannuation benefits. In doing this, it recognises the principles set out in the High Court case of Todorovic and Waller namely that after tax earnings should be valued using Court or statutorily imposed discount rates. It also recognises that different jurisdictions impose different valuation bases. The valuations of these losses are based on the individual’s pre accident health. The practice also performs valuations of the loss of profits or income from a project. These calculations generally include projections of markets, revenue and costs.
- Valuation and certification of care costs– the practice performs valuations of the costs of future medical and personal care as well as the purchase, maintenance and replacement of medical and living aids. In doing this, it follows the principles outlined above and reflects the post accident health of the litigant.
- Statistical and probability studies– the practice undertakes statistical and probability studies to assist in determining the likelihood of actions contributing to consequences.
- Population modeling-The practice creates models of animal and fish populations. These models assist in determining liability and quantification of damages.
- General consulting– The practice can assist litigants (actual or potential) or their representatives in matters that involve longer term projections of any nature. In particular, it can review and advise on other actuaries’ expert evidence.
Valuations of losses and costs of care allow injured parties to be fairly compensated. In other areas of litigation support, the application of numerical rigour can assist in understanding the issues and the prospects of success.
The practice has been continually involved in the litigation support since its 1980 inception. It has worked for numerous solicitors and barristers in helping their clients with these issues. It is the practice’s experience that most cases do not go to trial and that, for those that do, actuarial evidence is rarely challenged. Nevertheless, some cases do go to trial and the practice has experience of giving expert evidence in these matters.
In general, the practice’s methodology allows for the determination of the income or cost that applicable to future years and the probability of this being paid or received. These amounts are generally adjusted for the impact of taxation. Depending on the nature of the loss being valued and the jurisdiction involved, allowance may be made for inflation. These expected payments are then discounted to obtain a present value. The discount rate that is used also depends on the nature of the loss and on the jurisdiction.
As in all fields, the practice gives due regard to the likely range of results as well as the central estimate of the result. Generally, however, Courts do not take this aspect into account.
The practice can supply contact information of the people for whom it has worked in this connection.
The information that the practice needs to value losses of income comprises:-
- Details of the injured party’s pre injury earnings and superannuation arrangements,
- If the injured party had not yet embarked on a career, details of the earnings of people in the planned career are needed,
- The date of birth and both pre and post injury health of the injured party are needed. Generally, the health statement can take the form of either a statement to the effect that they:
- are in normal health for one of their years,
- an instruction to assume that they will suffer mortality rates applicable to a person n years above their true age or
- an instruction to assume that they will suffer mortality rates p% higher than those appropriate to their age.
- Where the cost of ongoing care is being valued, for each item of equipment, the following is needed:
- capital cost,
- annual maintenance and consumables expenditure and
- replacement period
- For each item of wages or other expenditure, the following is needed:
- annual expenditure for ongoing items and
- frequency and cost of intermittent items.
- In all cases, an indication of the areas in which the cost of care is expected to increase for reasons other than inflation is needed.
- In valuations of other losses of income, the information needed generally includes details of the pre and post incident accounts of the subject entity. Other information needed generally depends on the nature of the losses and is discussed at the time of appointment.
The practice believes that quality service justifies its price, but seeks to be competitive in its fee structure and will quote fixed or maximum prices if required.
Hourly fees apply unless the task is solely related to the production of a standard certificate. Where the task makes substantial use of standard systems, usage charges apply.
Fees quoted do not include GST.
|[Life and remainder interests]|
|Apportionment of an estate into life and remainder interests – calculation fee||$175||Item|
|Apportionment of an estate into life and remainder interests – estate value fee||$0.50||$’000|
|Apportionment of an estate into life and remainder interests – matter fee||$175||Item|
|[Superannuation family law]|
|Family Law (Superannuation) Regulations calculation – value fee||$0.25||$’000|
|Family Law (Superannuation) regulations calculations -matter fee||$350||Item|
|Jongen’s case – assignment||$140||Item|
|Jongen’s case – calculation||$14||Item|
|Jongen’s case – lowest value||$0.50||$’000|