Economic Damages

When it comes to Economic Damages, a significant challenge is securing a technically skilled forensic accounting firm, who is also able to communicate information in an easily understandable way. Economic Damages are rooted in the lost profits of a business. Through careful analysis of lost revenue and avoided costs, we arrive at a reliable Economic Damages amount.

Methodology
Economic damages “represent the difference between the plaintiff’s actual profits and the profits that the plaintiff would have realized but for the defendant’s actions.” Simply stated, economic damages are the lost net profit over the damage period. The calculation begins with estimating revenue that would have been earned but-for the wrongful act(s), which is then reduced by avoided costs and expenses. Finally, actual profits earned through mitigation are subtracted to compute the economic damages.

Why Should You Retain an Expert?
Although the above methodology may seem straightforward, expert assistance is vital in arriving at economic damage calculations that will withstand scrutiny. Expert witnesses are deemed “experts” for more than one reason. An expert should be retained due to the complex nature of economic damage calculations, the need to explain conclusions simply and persuasively, and the credibility and independence that only a highly credentialed independent expert can provide. The attorney’s challenge is finding the firm with the highest technical skills combined with the ability to communicate their findings to a trier-of-fact in an easily digestible way.

At Cogence Group you can expect our highly trained, nationally accredited professionals to perform sophisticated financial analyses, stay current on the latest state and federal court cases, work with attorneys to meet tight deadlines, use the latest technology to perform complicated projects efficiently to help control the costs of litigation and communicate our findings in a clear, concise and understandable way.

Cogence Group is routinely retained by attorneys and business owners to develop and present economic damages reports for plaintiff attorneys or critiques such reports for defense counsel, providing services during each phase of litigation.

Prior to filing a complaint—

• Perform a preliminary damages evaluation, and

• Inform attorney’s case strategy

During discovery—

• Support requests for documents,

• Evaluate opposition theories and damages claims,

• Prepare written reports, and

• Provide deposition testimony and questions for the opposing expert

During settlement negotiations—

• Present damages case,

• Support settlement discussions

Trial preparation—

• Prepare exhibits,

• Create outline for direct testimony, and

• Provide cross examination questions for opposing expert(s)

Trial—

• Provide testimony,

• In-trial analysis, and

• Tactical support

In a complex federal court case where Cogence Group was retained by the plaintiff’s attorneys, we provided expert analysis, testimony, and assisted in the efforts to cross examine the opposing parties and experts. Our client alleged their supplier produced faulty lids that did not close properly, resulting in damaged inventory and economic losses of approximately $10 million. The opposing expert opined that our damage calculations were overstated due to “erroneous” calculations. In response, our team objectively wrote a rebuttal report summarizing in what ways the opposing expert based their opinion on incorrect assumptions and/or the unreliable applications of economic damages theory, methodologies, and analysis.

Because of Cogence Group’s extensive experience in Economic Damage cases and complex litigation, our client and their legal counsel always remained one step ahead. As a result, the case settled in a manner that left both the client and attorneys pleased.

Does your litigation matter include complex economic damages issues?