The Role of the Forensic Economist in an Employment Law Case

First of all, understand that a forensic economist is required for trial. Only through expert testimony will damages calculations be seriously considered by a jury. The more subtle opportunity for exploitation of a forensic economist’s powerful skills arise, however, earlier in the engagement during settlement negotiations.

The forensic economist ascertains a reasonable range of economic damages due a former employee. This provides useful information to the attorney and client from the very first demand. A skilled forensic economist provides valuable advice and insight, adding to the team’s expertise, possibly even discovering an issue or argument of which the trial lawyer might not be aware. When this occurs, more often than not, this "extra weapon" offsets or exceeds the expert’s fees by providing additional recovery. Because of these experts’ obvious importance to successful litigation of employment discrimination cases, it is essential that counsel have solid relationships with several forensic economists with exceptional national reputations.

In general, forensic economists offer damages analysis consisting of several steps. First, the forensic economist will develop a theory of damages. By conducting a "but-for" analysis, the focus becomes what recovery is necessary to put the former employee in the position he or she was in, and would still be in, had the unlawful discrimination not occurred. The forensic economist will then make any necessary adjustments, such as discounting future payments to present value. After the lawsuit is filed, the expert presents the final information in the form of a report with cited sources, spreadsheets, and references.

If negotiations break down, the forensic economist can assist at all phases of the litigation. For instance, before the complaint is even filed, the economist can estimate economic damage, and allow the use of his or her name for offensive purposes, e.g., allowing the use of his or her resume and the threat of raising the ante as a "bargaining chip" to induce settlement. Later, during the discovery phase, the economist can assist in the review of documents and the defendant’s expert’s report, helping the attorney develop deposition questions. In the post-discovery settlement and pre-trial phase, the expert can assist in evaluating final settlement offers. Finally, should the case go to trial, the economist will prepare for trial, including preparing damages reports, question scripts, and exhibits. At trial, the economist will present testimony and develop questions to put to the opposition.

When retaining a forensic economist, the attorney will check with the economist for conflicts of interest and prepare or review a written agreement concerning the scope of the work, fees, expenses, and retainer. Early in the engagement, the economist should submit to the legal team and client an overall management plan which outlines tasks, resources, milestones, and a budget. This greatly reduces surprises, enhancing the overall quality of results. The expert selected will be a member of one or both of the following associations:

National Association of Forensic Economics

American Economic Association

Both organizations have excellent web sites with an extraordinary amount of helpful information about resources, the profession, trends, and sub-specialties.