Five Economic Damages Red Flags Every Litigators Should Know

Economic damages can drive the value of a case. In personal injury, wrongful death, and employment litigation, projected losses may represent the largest component of claimed damages. But a large number is not necessarily a reliable one. A report built on weak data or unsupported assumptions can derail settlement discussions and become vulnerable under cross-examination. Attorneys on either side can identify many methodological weaknesses early. Start with these five red flags.

The Five Red Flags

Red Flag #1: Base Earnings Are Not Adequately Supported

• What to look for: The calculation relies on one unusual tax year, unverified self-reported income, or a wage figure that is inconsistent with payroll records, employment history, or relevant industry data.

• Why it matters: Every projection builds on the starting figure. If the baseline is unreliable, wage growth, fringe benefits, and present-value calculations merely compound the error.

Red Flag #2: Career Advancement Is Treated as a Certainty

• What to look for: The report assumes promotions, raises, or career milestones without support from the individual's prior trajectory, employer practices, qualifications, or reliable industry evidence.

• Why it matters: A plausible opportunity is not the same as a reasonably supported projection. Each step in the assumed career path should be tied to evidence rather than hindsight or or advocacy.

Red Flag #3: A Rigid or Overly Optimistic Worklife Expectancy

• What to look for: The expert assumes the individual would have worked continuously to a fixed retirement age-often 67-without accounting for the probabilities of unemployment, disability, labor-force withdrawal, or early retirement.

• Why it matters: A fixed age is not the same as a statistically supported worklife estimate. As whether the projection reflects accepted worklife data and the individual's actual employment history.

Red Flag #4: Discount Rates and Inflation Do Not Fit Together

• What to look for: The report uses an outdated interest rate, selects a rate without explaining the source, or treats wage growth, inflation, and investments returns as unrelated inputs.

• Why it matters: Small changes in these assumptions can materially change the present value of a long-term loss. The report should disclose its sources, explain its methodology, and apply the assumptions consistently.

Red Flag #5: Household Services Are Omitted or Overstate

• What to look for: The expert ignores household services altogether or assigns hours and replacement rates without connecting them to the person's pre-injury activities, post-injury limitations, or reliable time-use and wage data.

• Why it matters: Household services can be a legitimate component of economic loss, but unsupported assumptions make the claim easy to challenge. The valuation should be individualized, transparent, and reproducible.

The Bottom Line

A defensible economic damages report rests on verifiable data, transparent calculations, and assumptions that fit both the evidence and the methodology. Spotting weakness early gives counsel time to test the inputs, request supporting materials, refine case valuation, and prepare a more focused examination of the expert.

Need an Objective Review of an Economic Report? Put the numbers to the test.

Whether you are evaluating an opposing expert's calculations or preparing your own damages analysis for scrutiny, and independent review can identify vulnerabilities before they become litigation problems. Contact us today to discuss a confidential preliminary case assessment.