Time Valuation as an Alternative to Lost Enjoyment of Life in Determining Wrongful Death Damages

Abstract

In a wrongful death case1 the task of the jury, if liability is found, is to award those pecuniary and non-pecuniary damages to the decedent’s survivor(s) that would make them whole. Steven Shavell (2004) defines pecuniary and non-pecuniary losses as follows: Pecuniary losses are those that either are monetary or are losses of goods that can be purchased in markets, in which case the measure of the losses comprises the replacement costs. Non-pecuniary losses correspond to the losses in utility suffered when irreplaceable things have been destroyed, such as family portraits or other unique objects. Making the survivors of a decedent whole, of course, is impossible and, in practice, testimony by a forensic economist on wrongful death damages is usually limited to calculations of lost earnings support and household work services the decedent could have provided survivors. There are other compensable pecuniary damages suffered by survivors of a decedent such as the advice, counsel, instruction, supervision, and care a decedent may have provided survivors for which a replacement cost might be calculated. Finally there are the usual non-pecuniary losses of pure companionship, consortia, love, affection, the loss of the enjoyment of the decedent’s life and bereavement suffered by survivors which are usually categorized as intangibles and left to a jury to decide or are prescribed by statute. The fundamental difference between pecuniary and non-pecuniary damages is that pecuniary damages are associated with a productive use of time (such as work, offering advice and counsel, or giving care, support, or assistance) while non-pecuniary damages derive from the pure utility of relationships alone. Schwartz and Thornton (1989) suggest that economists should approach damages from a utility base which would incorporate both the tangible (pecuniary) and intangible (non-pecuniary) losses suffered by survivors of a decedent. Such a holistic approach to damages is beyond the capacity of traditional means of calculating wrongful death damages by economists. A number of states, over the past two decades, have attempted to