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Lost Personal Earnings Analysis

Whether you are a plaintiff or a defendant, the issue of damages is usually a critical component of the decision of whether to litigate or to settle. A claim for damages that is based on sound economic analysis and well supported by financial data and information significantly enhances a plaintiff's position. On the other hand, a speculative claim that is not based upon a thorough analysis of the available financial data and information will strengthen the defendant's case. Analyzing personal earnings lost due to injury, death, employment discrimination or termination is an area in which McGovern & Greene excels.

McGovern & Greene's CPA's and consultants have the technical expertise and experience to analyze complex situations, assist with discovery, and render effective independent professional opinions. Our professionals are certified in financial forensics and have significant experience analyzing lost earnings. James L. McGovern has testified as an expert on such matters on numerous occasions.

Representative engagements include:

• As the damages expert engaged by the defendant, M&G analyzed the lost earnings claim made by a family practice doctor after an injury he suffered reduced his ability to work. M&G determined that in contrast to plaintiff's claimed $10+million if lost earnings, actual lost earnings were no more than $259,000. M&G's analysis of the plaintiff's claim showed that plaintiff's expert failed to (a) account for the doctor's actual earnings, (b) properly consider the doctor's continuing revenue stream from insurance contracts, (c) acknowledge restrictions on the doctors medical license that where unrelated to his injury; and (d) failed to account for mitigation achieved by hiring replacement doctors for his practice. In addition, M&G found that plaintiff's expert had overstated the plaintiff's remaining worklife and used inconsistent definitions of pre and post injury income. Moreover, M&G also found that the plaintiff had attempted to hide his actual income by diverting earnings from himself to his wife.

• As the damages expert engaged by the plaintiffs, M&G identified approximately $1.7 million of lost past and future earnings for seven municipal employees who were denied advancement opportunities due to discrimination and illegal hiring practices. Lost earnings stemmed from denied promotions, failure to receive overtime opportunities, and lost pension contributions.

• As the damages expert engaged by the defendant, M&G analyzed the lost earnings claim made by a bond trader after he suffered a knee injury in a slip and fall accident. Plaintiff's expert opined that the plaintiff suffered up to $1 million in lost earnings. M&G's analysis effectively rebutted plaintiff's expert and identified losses of only $228,000. M&G found that plaintiff's expert had (a) failed to consider factors other than the injury that contributed to plaintiff's losses, (b) used an unreasonable time frame for losses, (c) used an unreasonable work-life estimate, and (d) used estimates that were unsupported by the facts.

• As the damages expert engaged by the plaintiff, M&G identified the lost earnings and loss of household services suffered by a used car salesman who was severely injured in an auto accident. Based on analysis of the plaintiff's historical earnings, industry and economic data, M&G identified the likely amount plaintiff would have earned but for his injuries and compared that amount against his actual post-injury earnings. To determine the value of lost household earnings, M&G interviewed the plaintiff's widow to determine the types of services the plaintiff had performed prior to the accident and the amount of time he typically spent on those tasks. M&G then compared for reasonableness, her estimates of service hours lost to the Bureau of Labor Statistics data concerning typical levels of household service. Finally, M&G applied average labor rates for each type of service lost based on Bureau of Labor Statistics data for the geographical area.


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