Sample Essay on Forensic Economic

Over the last three decades the profession of forensic economics has experienced rapid growth, and an expansion into all areas of civil torts and public law. A forensic economist is an economist who applies the general theories and methodologies of economics to the measurement of damages and/or proof of liability in litigation. In the past, the field of forensic economics has been viewed as a mere extension of other fields of economics such as labor economics and price theory. During the past two decades though, it has become a unique discipline, and in 1985 the National Association of Forensic Economics (NAFE) was founded. It now has over six hundred members in all fifty states, and six common law countries.

Prior to the twentieth century, damage calculations in civil torts were largely restricted to commercial torts. In English common law, precedents existed for the award of pecuniary damages when commercial interests were infringed upon, or when personal property was destroyed. However, there was no precedent in awards for personal injury or death in either the course of employment or from the use of dangerous products. It was through the evolution of British and German common law that the first actual known tort case; one in which a person was sued for negligence and causing personal injury, taking place in England in 1937. In 1912, E.H. Downey wrote concerning issues in 1911 work accidents caused 35,000 deaths and about two million injuries. With the industrial revolution came the passing of the workman’s compensation act as well as the FDA, which finally was able to protect both consumers and workers. This finally allowed tort law to also be used in personal injury cases, and enabled protection to those who previously had been left to just accept it and move on.

The forensic economist has many considerations in the determination of the economic loses. In recent years the NAFE has come to an agreement on several areas of methodology, such as the projection of fringe benefits, hedonic damages and personal consumption. Despite the fact there are still many areas on which they disagree, more research and writings are helping to create a universal system that will define the determinations of the loses. As of now, the forensic economist must juggle several different issues when determining loses in both injury and death cases. The most crucial and frequently attacked areas of methodology are household services and Work life expectancy. Other areas taken into account are Base earnings, Discount Rates, Taxes, and residual earnings. (more…)

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