Getting the final number
After experts have estimated lost profits, they discount these estimates to present value. Some jurisdictions have statutory discount rates, but more often experts will build up discount rates based on informed judgement and professional opinions about risk applicable to the subject company. In certain instances, small differences in discount rates can generate large differences in an experts’ final conclusion within an individual method. Therefore, it is prudent when possible to use multiple methods that are reconciled to avoid contention over this issue.
The final step in determining economic damages is to consider mitigation efforts by the plaintiff. Some jurisdictions expects plaintiffs to exercise their duty to mitigate economic damages and minimize potential losses.
Common pitfalls to avoid
Over and underestimating economic damages can be limited by considering a few key factors:
Plaintiffs suffer economic damages for numerous reasons. An experienced economic damage professional can calculate and testify to your economic damages with confidence. An objective expert that is familiar with industry standard techniques can withstand an admissibility challenge and avoid potential pitfalls.
© 2017 (rev. 2020)