1995

59 Alb. L. Rev. 693

PLAINTIFF BIAS IN THE CPLR 50-A/50-B STATUTES

NAME: James Lambrinos*, Oskar R. Harmon**

BIO:

* Professor, Graduate Management Institute, Union College, Schenectady, New York, 12308, (518) 388-6253.

** Associate Professor, Department of Economics, University of Connecticut, Stamford, Connecticut, 06903, (203) 322-3466.

ABSTRACT

The computation of economic damages in tort cases in New York State experienced a major change in 1985 with the enactment of Civil Practice Law & Rules Article 50-A and 50-B (CPLR 50-A/50-B). n1 This law represents a major departure from the previous methods used in New York as well as the methods used in other states. n2 In place of the traditional presentation to the jury of the present value of the economic loss, the statutes require the presentation of the undiscounted value. n3 For awards in excess of $ 250,000, the judge is required to convert the jury award into a schedule of structured payments using a formula stipulated in the statute. n4 This study shows that the CPLR 50-A/50-B structured payment formula systematically overvalues the jury award. n5

The next section explains the general structure of an economic loss calculation. It reports the undiscounted value and the present value of the economic loss for nine examples that span a wide range of plaintiffs. Section II explains the CPLR 50-A/50-B structured [*694] payment formula. The plaintiff bias in the formula is illustrated by a comparison of the present value of the jury award to the present value of the structured award for the nine examples developed in section I. Section III presents an example involving multiple types of damages. Section IV explains the three mathematical errors responsible for the plaintiff bias. Section V evaluates the "4% solution."