It's not just financial experts who are adding personal injury economic damages calculations as a key skill and part of their practice today, as the number of personal injury and other economic damages claims continue to grow. Attorneys are increasingly finding they can save time and money by doing an initial economic damages calculation themselves before they hire an expert. One reason they can do these assessments is simply to decide if a case is worth their while at a much lower cost than hiring an expert to determine that. 

Not only is the economic damages calculation field growing and on the verge of a potentially huge boom driven by COVID-19 crisis—indicating a higher future case load for attorneys—there are plenty of resources to help attorneys as well as financial experts quickly get up to speed performing these types of damages analysis.

Here are three good reasons to consider adding personal injury, wrongful death and wrongful termination damages calculations to your practice, and an introduction to resources to help you get started.

1. Surging Demand

These types of economic damage claims in the U.S. are already large, growing, and increasingly complex. For personal injury cases alone, recent government data suggests that there are more than 400,000 civil litigation suits brought every year from roughly 31 million recorded personal injuries.

Moreover, the COVID-19 crisis has already ratcheted up litigation that is likely to increase the number of future claims involving these types of economic damages. JD Supra is tracking almost a dozen trending litigation topics that may involve damages, and it claims a wave of COVID-19-related litigation is already rising. This means that not only the number of cases involving substantial economic damages (e.g., in excess of $50,000) is growing, but that it looks like it will continue to grow for quite a while. 

2. More Resources to Help you Get Started

Much like the valuation field, the personal injury damages field has developed a set of analysis, data and reporting best practices necessary for performing personal injury economic damages calculations.

The first step an aspiring assessor of economic damages should take is get a copy of Determining Economic Damages from James Publishing. Originally authored by Gerald Martin in 1988, it's been updated every year since and is a definitive resource on wrongful death and personal injury analysis. Best of all, the book comes with over 100 questionnaires, tables, and worksheets developed by expert finance professor Dr. Gerald Martin, who was affiliated with the National Association of Forensic Economists.

Determining Economic Damages guides financial practitioners from start-to-finish, walking practitioners through the steps including: 

• How to determine past and future income losses;
• The value of personal consumption;
• Adjustments for personal consumption and taxes;
• The replacement value of household services;
• Life and work life expectancy;
• Convert future losses to present value; and
• How to put everything together to calculate loss.

The Journal of Legal Economics, from The American Academy of Economic and Financial Experts (AAEFE), is another much-loved publication by those performing economic damages calculations. It provides regular updates on calculation methods, data sources, legal cases, and much more. 

Moreover, there are plenty of online instruction resources. The National Association of Certified Valuators and Analysts (NACVA) has an ongoing series of webinars that regularly cover topics including topics such as "Calculating Damages in Personal Injury."

3. Software Pulls it all Together

In recent years, getting access to the data you need to perform and support damages calculations has become easier. Some of the data is published by the government and some of it is available from vendors and publishers in the industry. However, pulling it all together yourself still takes time.

Many damages experts now rely on software to pull together the analysis, data integration and report creation, many claiming it cuts the time it takes to build damages assessment reports by up to 50 percent. A variety of vendors offer programs that automate and standardize the process of developing economic damages claims, with the possibility to have much of the relevant data built in, smart navigation through the damages calculation process, a built-in workflow decision tree to walk you through the numerous assumptions and options, including assumptions related to relevant state law. 

Jeffrey H. Harwell, CVA, MAFF, CMEA, regularly does economic damages calculations for clients even as the majority of his business remains business valuation work. "With today's damages software that includes tutorials and guides you through best practices, someone not trained in finance can feel confident constructing a preliminary economic damages calculation," he says. "Once you've learned the ropes, many of the standard requests I get from attorneys are pretty easy to put together." 

Harwell adds that with today's software so easy to learn and use, many law firms should probably consider buying it themselves and training a paralegal on it. "Especially if they do a lot of these, it would completely make economic sense for attorneys to take this in-house instead of paying guys like me," he explains. "That wouldn't have been true 10 years ago because software wasn't readily available and data was too difficult to find." 

Harwell charges about $2,000 and up for an initial economic damages assessment for attorneys who are trying to decide whether to take a case. "The truth is, if attorneys are doing more than a half dozen of these sorts of assessments per year, they can save a tremendous amount by taking it in house." 

These preliminary assessments can not only help attorneys decide whether or not to take a case at a much cheaper rate than if they hired a financial expert to help them do it, they can potentially be useful for pre-trial settlements, too.

The choice is not always one or the other: Attorneys can use software to construct preliminary damages assessments themselves, and if there are particularly complicated aspects of the case they can call on support from software vendors or reach out to experts like Harwell to help on particular issues at a lower cost than outsourcing all of the assessment to someone else. 

With an industry facing accelerated growth, newly capable and affordable software that comes with support from practicing damages experts, there has never been a better time to add personal injury damages services to your practice.

David Fein is the CEO and co-founder of ValuSource, the #1 source for business valuation and damages calculation software. With over 90% market share, ValuSource provides most of the valuation and damages software used by thousands of financial professionals worldwide. ValuSource also creates Damages Advocate for economic damages calculations. Check out the Damages Advocate product video, explore features and benefits, see more on how it works, get a free demo, and learn more about pricing by calling: (800) 825-8763.