Worklife Tables Skew Damages Claims

by Jerome M. Staller, Ph.D.

A recent trend warrants careful consideration by plaintiff and defense counsel in personal-injury matters where damages to earning capacity is a key issue. Certain vocational counselors, usually with degrees in education or career counseling, are representing themselves as having expertise in economics — specifically, the ability to calculate lost earnings and other economic damages stemming from an injury — while misapplying statistical studies of the impact of an injury on the ability to earn a living.

Traditionally, the vocational expert provides a report that outlines the type of work the plaintiff can perform given the injury, and also determines what the plaintiff might reasonably be expected to earn from this type of work. The economic expert then determines the probable growth and duration of the plaintiff’s income given the injury. The economic expert also calculates what the plaintiff’s earning capacity would have been had the injury not occurred. The difference between the two values — earning capacity absent the injury minus earning capacity given the injury — is the measure of the plaintiff’s lost-earnings damages.

The calculations made by economists in determining lost earning capacity are grounded in certain generally accepted principles of economics — how inflation of other variables affect the growth of income, how the statistical earning capacity of cohorts relate to the individual plaintiff, and how such factors as national productivity affect earnings.

One of the primary determinants of earning capacity is worklife, or the amount of time a plaintiff of a certain age, with whatever physical or mental limitations that exist, can expect to be active in the work force. An economist will consider many sources to determine probable worklife. These sources include statistical work-life tables, compiled with Census and other data; modal retirement-age data; corporate retirement data; and active-life expectancy studies (how long could a person of a certain age and sex expect to be active, as opposed to requiring nursing care?)

Certain vocational experts, however, now render worklife testimony based solely on a study purporting to show reduced statistical worklife for disabled persons. This study, The New Worklife Expectancy Tables: Revised 1995 for Persons With and Without Disability by Gender and Level of Education , compiled by A.M. Gamboa, Jr., and published by Vocational Econometrics Inc., 1995, uses flawed assumptions to predict the worklife of disabled persons.

Put simply, the tables appearing in the study fail to differentiate between mild disability and severe disability. According to the study, the worklife of any disabled person is the average of the expected worklife of a severely disabled person and the expected worklife of a mildly disabled person, giving a range of worklife for all disabled persons at the mid-point of these two extremes. This is clearly erroneous — a person who has lost a finger is, statistically, highly likely to be able to find work and keep job, while a quadriplegic is highly unlikely to find work and keep a job. By simply taking the average of the two extremes, the study misrepresents the likelihood of continued employment for most disabled people. The midpoint between near-nonexistent disability and near-total disability is a much more serious reduction of worklife than the vast majority of lost earning-capacity claims warrant, and is based in any event on seriously flawed logic. (The study is flawed in several other respects. The shortcomings of the statistical methodology used in the study are discussed in much greater detail in a review by Frank P. Corcione appearing in the Journal of Forensic Economics, Fall 1995 (Volume VIII, Number 3)).

To say that the New Worklife Expectancy Tables are flawed is not to say that disabilities never result in shortened worklife expectancy. Severe injury and severe disability obviously can and often do result in shortened worklife. The data that form the basis for The New Worklife Expectancy Tables, however, absolutely do not capture probabilities of reduced worklife expectancy due to disability. A much more effective study would examine workers who were prevented by disabilities from resuming their former occupations. Certain disabilities, even some severe disabilities, may not have a bearing on earnings, depending on the occupation in question. For example, an attorney who has lost a limb may not experience any diminished earning capacity since an attorney probably practice just as effectively after such an injury as before the injury, while a carpenter who has lost a limb would clearly suffer some diminished earning capacity.

Vocational experts who rely on The New Worklife Expectancy Tables also tend to inflate plaintiffs’ claims by combining the reduced worklife claim with a claim of reduced income. Clearly, most injured plaintiffs will have a diminished earning capacity, yet only in extreme instances is worklife significantly diminished. Typically, when a vocational expert reports on the ability of a plaintiff to work, the vocational expert will examine and test the plaintiff to determine what types of jobs the plaintiff, given his injury, will be able to perform throughout his normal worklife. In other words, if a laborer whose pre-injury worklife was 10 more years is injured and can only perform sedentary work, the vocational expert will list in the vocational report sedentary jobs that the plaintiff would be able to perform for ten more years. The loss is a function of diminished income over the ten years of remaining worklife, not diminished income and diminished worklife. Vocational experts who testify to reduced wages and diminished worklife are frequently inflating damages claims without a sound basis.

One recent damages claim put forth by a vocational expert relying on The New Worklife Tables serves as a very good example of the problems testimony by vocational experts can present. The plaintiff, formerly a carpet installer, suffered neck, cervical and lumbar difficulties following a boating accident. The vocational expert posited two separate damages scenarios. First, he assumed total disability, basing damages on a pre-injury capacity of $39,000 per year with a pre-injury worklife expectancy of 20.05 years. That scenario resulted in a claim of $919,989 in present-value earning-capacity damages.

In the second scenario, the vocational expert assumed that the plaintiff might undergo successful rehabilitation, enjoying a post-incident earning capacity of $35,000 pre year with a post-injury worklife of 10.35 years. The present value of lost earning capacity damages under this scenario is, the expert testified, is $490,448.

If medical testimony had indicated total disability, the first scenario might be acceptable. It is hard to imagine, however, that a totally disabled worker could, with some therapy, return to work earning almost as much as he had prior to his injury. There was no medical testimony in the record supporting such an assumption. Even if there had been a basis for such a remarkable turnaround in the plaintiff’s ability to work, nothing in the record, except the vocational expert’s claimed reliance on The New Worklife Tables, could explain why the almost totally rehabilitated plaintiff’s worklife expectancy would still be diminished by almost half what it had been prior to the injury. Was he or was he not almost totally rehabilitated?

Finally, some vocational experts who rely on The New Worklife Expectancy Tables do not personally examine plaintiffs, but instead base their entire testimony solely on the statistical data in the study. Normally, a vocational expert will examine the individual plaintiff physically and make a reasoned assessment of the plaintiff’s physical and mental ability to work and earn. While statistical averages, when properly applied, can stand as a proxy for a single individual, a vocational assessment is much more accurate and credible when the single individual’s unique attributes are considered. A vocational expert who fails to personally examine a plaintiff is overlooking the most significant evidence available as to the plaintiff’s ability to work.

Plaintiff’s counsel considering using vocational experts who rely on The New Worklife Expectancy Tables should be wary. This author knows of no instance yet where vocational testimony based on the Gamboa study was rejected by a court on Daubert or Rule 702 grounds, but it is clear that a challenge to the statistical methodology of the study should be successful.

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This article is reprinted with permission from the November 1999 edition of Medical Malpractice Law & Strategy.© 1999 NLP IP Company. Law News Network

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