Lobbying Affiliate: MML&K Government Solutions

“Addressing the Real Problems for Law and Economics of Factoring Interest Rates, Earnings Growth and Inflation into Awards for Lost Future Earnings,” 56 U. Pitt. L. Rev. 1 (1994).

Attorneys

April 12, 1995

Katherine K. Yunker, Addressing the Real Problems for Law and Economics of Factoring Interest Rates, Earnings Growth and Inflation into Awards for Lost Future Earnings, 56 U. Pitt. L. Rev. 1 (1994)

The difficulties with lost-earnings awards (whether for an individual or an enterprise) stem from dependence on predictions of the economic future. The article proposes a method to eliminate the need to predict the earning power of a lump sum of money awarded today to compensate for damages which will occur in the future. This would be accomplished by employing a form of debt obligation, issued and backed by the U.S. Treasury and available for purchase on the open market, that assures payment of a certain sum of money on a specified date in the future. Stating a lost earnings award in terms of these debt obligations would avoid prediction and its attendant costs and preserve finality of judgment.

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