The Use Of Economic and Vocational Experts To Prove Damages

by Michael B. Bogdanow
Meehan, Boyle, Black & Bogdanow, P.C.
Boston, Massachusetts
© May, 1999

Economists and vocational experts are often useful as consultants and as trial witnesses in connection with the damages issues that arise in civil litigation. This article summarizes the ways that these two types of expert witnesses can be used, and the relationship between the two.

Economists

Economists, actuaries2 and accountants3 may serve as economic experts. The choice of expert will depend upon the precise nature of the damages alleged.

Economists are generally used where “present value” calculations must be made. For example, damage awards for future losses should be reduced to their value on the date that the action was commenced.4 While the court may not always require expert testimony on this issue,5 it is generally wise to have an economist testify as to the proper methodology for the reduction. When large awards covering a lengthy period of time are at issue, each party’s expert may offer a significantly different perspective on present value based upon his differing economic assumptions. As a practical matter, use of an economic expert in these cases is often helpful, even if not required.

Actuarial testimony about the plaintiff’s expected life span at the time of the injury is useful whenever damages extend into the future. While the use of actuarial tables may be sufficient,6 either party may wish to explain or challenge the assumptions underlying the tables.7 For example, a defendant may claim that the plaintiff’s health prior to the accident was such that the plaintiff did not fit into the category to which she was assigned by the plaintiff’s expert.8 In these cases, the parties should consider introducing expert testimony.

In some cases, the economic expert can estimate the value of the damages which the plaintiff has suffered. Where the plaintiff has alleged tortious interference with her business, expert testimony as to the value of lost profits may be offered,9 although lost profits need not be proven with mathematical certainty.10 An accountant may be useful in connection with proving, or even disproving, a claim of lost profits. A claim for loss of good will may also be an appropriate subject for expert testimony.11 In some cases, the practitioner should first offer the testimony of an expert in the specific field of the plaintiff’s business to assist the jury in determining the loss of future profit or good will. An economist can then assist the jury in reducing this value to its value at the time of commencement of the action, in estimating future losses, and in understanding other financial or economic issues.

The practitioner should take steps to ensure that the economist’s opinion takes into account the particular circumstances of the plaintiff’s damages. For example, in Van Brode Group, Inc. v. Bowditch & Dewey,12 the court concluded that it was within the trial judge’s discretion to exclude expert valuation testimony that was based extensively on industry-wide projections and that did not sufficiently take into account the plaintiff’s actual circumstances.13 A similar problem was encountered in Cambridge Plating Co., Inc. v. Napco, Inc.,14 where the expert’s opinions as to lost profits were reduced because of the expert’s inflated views as to the amount and duration of the lost profits.

Vocational Experts

Although the Supreme Judicial Court has stated that impairment of earning capacity “rests largely on the common knowledge of the jury,”15 testimony from a vocational expert as to earning capacity may assist the jury in this determination. In addition to testimony about the plaintiff’s past employment record, earnings and receipt of fringe benefits, vocational experts may testify as to special skills possessed by the plaintiff which render her damages more substantial.16 The expert may offer an opinion of the value of the plaintiff’s services, which is particularly helpful when the pay scale in the plaintiff’s profession is unfamiliar to the fact-finder.17

Restrictions based on remoteness of time and intervening events apply where a plaintiff seeks recovery for impairment of earning capacity. Use of a vocational expert in conjunction with an economic expert can help avoid the pitfalls of relying solely on the plaintiff’s testimony as to the impairment of her future earning capacity.

Vocational experts may use their knowledge of the job market, employment trends and skills necessary to perform in various occupations to support their testimony as to the economic harm which the plaintiff experienced as a result of her injuries. Thus, vocational experts serve as a link between medical experts and economic experts. It is not necessary to utilize a vocational expert, but where plaintiff’s earning capacity is in doubt, as for example in the case of an injury to a minor child or an unemployed adult, the testimony of a vocational expert can significantly bolster plaintiff’s claims as to lost earnings.

Admissibility of Economic and Vocational Expert Testimony

The practitioner should take steps to ensure that the economist or vocational expert is qualified to testify and that her opinions are admissible. To be qualified to testify, the expert should possess knowledge or experience beyond the common knowledge of the fact-finder18 but need not have an academic or scientific background.19 Although the trial court has wide discretion to admit or exclude an expert,20 in some instances, the trial court’s refusal to qualify an expert has been held erroneous as a matter of law.21 The court may preclude testimony where the expert seeks to testify outside established areas of expertise or where the substance of the expert’s testimony is a matter of dispute within the expert’s field.22 In Commonwealth v. Lanigan, 419 Mass. 15, 26, 641 N.E.2d 1342, 1349 (1994), the Supreme Judicial Court accepted “the basic reasoning” of the United States Supreme Court’s opinion in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). Both of these opinions indicate that the trial judge has a “gatekeeper” role to preclude expert testimony when “the process or theory underlying a scientific expert’s opinion lacks reliability.”Lanigan, 419 Mass. at 25-26. In federal court, this rule has not been restricted to “scientific” experts. Kumho Tire Co. v. Carmichael, — U.S. — (1999). In determining “reliability” the court may consider whether the community of scientists in the field generally accepts the theory or practice underlying the expert’s opinion, but even if the general acceptance test is not satisfied, the opinion may be admitted if the underlying theory or practice is reliable, or if it can be or has been tested or has been subjected to peer review or publication.23

Once qualified, the court may still exclude the expert’s testimony because an improper foundation has been laid to support her testimony. The Supreme Judicial Court has refused to adopt the approach to foundation evidence suggested in proposed Mass. R. Evid. 703 that the expert be allowed to testify on the basis of those sources “reasonably relied upon by those in the field.”24 Instead, the court has permitted an expert “to base an opinion on facts or data not in evidence if the facts or data are independently admissible and are a permissible basis for an expert to consider in formulating an opinion.”25 A voir dire may be used to determine whether the underlying facts are admissible and are of the sort that experts in the field reasonably rely on in forming opinions.26

Counsel should consider whether the proposed foundation evidence is properly admissible. If the expert is asked to testify on the basis of hypothetical questions, the assumption must be supported by independently admissible evidence.27 An adverse party should object to a hypothetical question that is based on unsupported assumptions, and should use cross-examination to question the expert as to the impact of material facts that were omitted from the hypothetical questions that were asked during direct examination.28

Conclusion

Early in the litigation, the practitioner should determine whether an economic and/or vocational expert would be helpful in the particular case. If so, the practitioner should ensure (1) that appropriate, reliable witnesses are retained, (2) that the witnesses are provided with proper supporting information, (3) that they are qualified to testify and (4) that their testimony will be admissible at trial.

Endnotes

1. Much of this article was incorporated from Chapter Twenty of the legal treatise Bogdanow, Massachusetts Tort Damages (Lexis Legal Publishing).

2. Cuddy v. L & M Equip. Co., 352 Mass. 458, 462, 225 N.E.2d 904, 907 (1967).

3. Fisher v. Fisher, 352 Mass. 592, 595-96, 227 N.E.2d 334, 338 (1967).

4. Trinity Church of Boston v. John Hancock Mut. Life Ins. Co., 399 Mass. 43, 52, 502 N.E.2d, 532, 537 (1987) (extending personal injury rule to property damage cases); Griffin v. General Motors Corp., 380 Mass. 362, 367, 403 N.E.2d 402, 406 (1980) (differentiating between present value reductions and interest).

5. See Worden v. Consolidated Rail Corp., 689 F. Supp. 35, 37-39 (D. Mass. 1988) and cases cited therein.

6. Turcotte v. DeWitt, 332 Mass. 160, 163-64, 124 N.E.2d 241, 244 (1955); Richards v. McKeown, 9 Mass. App. Ct. 838, 399 N.E.2d 877 (1980).

7. Turcotte v. DeWitt, 332 Mass. 160, 163-64, 124 N.E.2d 241, 244 (1955).

8. Harlow v. Chin, 405 Mass. 697, 714, 545 N.E.2d 602, 612 (1989).

9. Rombola v. Cosindas, 351 Mass. 382, 385, 220 N.E.2d 919, 922 (1966) (breach of contract action).

10. Rombola v. Cosindas, 351 Mass. 382, 385, 220 N.E.2d 919, 922 (1966); Computer Sys. Eng’g. Inc. v. Qantel Corp., 740 F.2d 59, 67 (1st Cir. 1984).

11. Fisher v. Fisher, 352 Mass. 592, 595-96, 227 N.E.2d 334, 338 (1967) (testimony of accountant on value of lost good will). See also Delano Grower’s Coop. Winery v. Supreme Wine Co., Inc., 393 Mass. 666, 681-82, 473 N.E.2d 1066, 1076-77 (1985).

12. Van Brode Group, Inc. v. Bowditch & Dewey, 36 Mass. App. Ct. 509, 633 N.E.2d 424 (1994).

13. Van Brode Group, Inc. v. Bowditch & Dewey, 36 Mass. App. Ct. 509, 519-21, 633 N.E.2d 424 (1994).

14. Cambridge Plating Co., Inc. v. Napco, Inc., 876 F.Supp. 326, 339-45 (D.Mass. 1995), affirmed in part and reversed in part, 85 F.3d 752 (1st Cir. 1996).

15. Griffin v. General Motors Corp., 380 Mass. 362, 366, 403 N.E.2d 402, 405 (1980).

16. Leave v. Boston Elevated Ry. Co., 306, Mass. 391, 394-96, 28 N.E.2d 483, 486 (1940) (expert qualified to testify on plaintiff’s musical skill prior to accident).

17. Leave v. Boston Elevated Ry. Co., 306 Mass. 391, 394-96, 28 N.E.2d 483, 486 (1940).

18. Commonwealth v. Makarewicz, 333 Mass. 575, 591-92, 132 N.E.2d 294, 303 (1956).

19. Muzi v. Commonwealth, 335 Mass. 101, 138 N.E.2d 578 (1956) (real estate appraisers experienced in buying and selling land).

20. Campbell v. Thornton, 368 Mass. 528, 541, 333 N.E.2d 442, 449 (1975) (disqualifying expert).

21. Muzi v. Commonwealth, 335 Mass. 101, 106, 138 N.E.2d 578, 580 (1956) (real estate appraiser); Moore v. Fleet Refrigeration, 28 Mass. App. Ct. 971, 552 N.E.2d 127, 129 (1990) (social worker).

22. See Commonwealth v. Mendes, 406 Mass. 201, 212, 547 N.E.2d 35, 41 (1989) (inadmissibility of polygraphic evidence).

23. Rotman v. Nat’l Railroad Passenger Corp., 41 Mass. App. Ct. 317, 669 N.E.2d 1090 (1996).

24. Department of Youth Serv. v. A Juvenile, 398 Mass. 516, 527-31, 499 N.E.2d 812, 818-21 (1986) (expressing concern that experts might introduce hearsay evidence by testifying on the otherwise “inadmissible” basis for their opinions).

25. Department of Youth Servs. v. A Juvenille, 398 Mass. 516, 531, 499 N.E.2d 812, 820-21 (1986).

26. Department of Youth Servs. v. A Juvenile, 398 Mass. 516, 532, 499 N.E.2d 812, 821 (1986).

27. State Bd. of Retirement v. Contributory Retirement Appeal Bd., 342 Mass. 58, 63-66, 172 N.E.2d 234, 239 (1961); Brown v. United States Fidelity and Guar. Co., 336 Mass. 609, 613-14, 147 N.E.2d 160, 162-63 (1958).

28. LeBlanc v. Ford Motor Co., 346 Mass. 225, 232, 191 N.E.2d 301, 305-06 (1963); Brown v. United States Fidelity and Guar. Co., 336 Mass. 609, 613-14, 147 N.E.2d 160, 162-63 (1958).