Self-Consumption in Personal Injury with a Life Care Plan

Child cases can often originate at birth due to alleged medical malpractice. The child in these circumstances may be born with multiple medical issues that require life-long care. In these situations, a life care planner will provide requirements and costs for the remainder of the child’s life. The economist will project the costs of the life care plan.

However, the lost earnings estimates can be further complicated if the life care plan is very extensive and requires care for shelter, food, home health, etc. For example, during their adult working life, a percent of future income would have been used for their own benefit for such things as shelter, food and health care. But since the life care plan provides funds for those items, expenditures on them do not have to be made out of income. Thus, a percent of the child’s future earnings that would have been allocated for these expenses would therefore be deducted from the loss estimate of his earnings capacity. In other words, it is necessary to determine the appropriate percent deduction for the self-consumption component for the child when he or she is projected to be cared for in a residential care facility.

The child’s personal consumption amounts must be derived using the expert’s usual methodology. One method is to make use of the percentage for incremental consumption for a one-person male family unit. As noted in Chap. 4 of this book, self-consumption varies by income levels. The process of removing self-consumption for the child avoids double- compensating the child since the extensive life care plan already provides for the loss (see Tinari 1995).

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