THE BURBANK GROUP
New York Personal Injury, Injury to Property and Wrongful Death Award Site
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www.NY50B.com)|
New York 50B Operating Systems and Terms
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The Valuation Solution Over the history of New York Article 50, valuation was primarily a device employed after and occasionally during trial. During trial, the parties sought immediate basic valuations with any adjustments and enhancements to follow the verdict. This led to extended negotiations, substantial post-verdict interest and increases in cash by assignment of interim payments. The plaintiff and the defense have often relied on annuity brokers to perform any valuation tasks. Most often, The brokers performed or contracted out the valuation tasks in anticipation of brokerage fees, and at no direct costs to the parties. This raises questions about the expertise and motivation of the evaluators and/or the adequacy of existing systems used to perform the evaluations. Now the dilemma! As attorneys are responsible for best representing the interests of their clients, they must be conversant with the provisions of Article 50, related statutes and case decisions. At a minimum, they must determine that
For the most part, the available valuation systems are accumulations of separate, fragmented worksheets on which individual calculations are performed, perhaps with some documented adjustments, but without any reconciliation. The separate worksheets take the future Award, deduct lump sums and determine initial annual payments by element. Another worksheet is usually added to show the calculation of fees using the sliding rate scale for 50A Awards. Discounted values are produced by year for each element, and expense and fee rates are applied to arrive at to arrive at Net discounted future Awards by element. The expense and fee rates are then applied to lump sums and past damages, and added to the discounted future damages to arrive at a total net Award. Cover sheets or affidavits may list rate assumptions in the valuation. The responsibility for application of the statutes, accuracy and documentation falls squarely on the attorneys, and without some form of reconciliation, the task is very difficult. The genius of the statutory schemes under Article 50 are that, if followed, the overall valuation of an element's future stream of payments will agree with the total of the annual discounted values for that element. That works if both methods of calculation are employed, and if elements are not impacted by Collateral Source offsets. If adjustments to element Awards and Valuations are separately documented applied, the whole process is reconciled. We have taken the statutory course to valuing damages. We have developed integrated systems that follow the flow of the statutes, have calculated total net discounted future Awards by element, have included monthly and annual payments, and discounted annual payments with totals by element, and incorporated documentation of Award components. In situations where Collateral Source offsets are applied, expenses and fees are over-allocated to net initial payments (initial monthly payment less initial monthly offset payment). By reducing the initial offset by expense and fee allocations, the total of annual discounted value will closely agree with the Net Award. In addition, the basic award systems extend backward to include Award and Verdict worksheets, and forward to include post-verdict interim payments, judgment worksheets and interest. Information We provide evaluation of the statutes, explanation of how the statutes and case decisions are incorporated into the valuation, and analyses of issues related to various functions and elements of loss. Statute evaluations include
Explanation of how the statutes and case decisions are incorporated into the valuations are covered under
Analyses of issues are included on the NY 50A/50B Forum. As issues of significance arise, analyses of available information will be performed and presented through the forum. To date, the greater part of the analyses relate to the application of discount rates indexed to the 10-Year Treasury and a strategy for settlement, capabilities for valuing Awards, and the treatment of Pain and Suffering. System Operations - New York 50B Personal Injury – A description of how General Liability Personal Injury Awards are valued, how interest is calculated and how Award payment schedules are updated to the judgment and payment dates. System Operations - New York 50B Wrongful Death – A description of how General Liability Wrongful Death Awards are valued, how interest is calculated and how Award payment schedules are updated to the judgment and payment dates. Solutions Award Development Award Development provide vehicles for building an Award using generally accepted methodologies, incorporating statutory limitations and providing the capability of updating Awards for the passage of time and the movement of portions of future damages to past damages. 50B Award Development is designed to deal with personal injury and wrongful death actions in line with the various statutes. In wrongful death actions, future loss elements continue to be treated as such. The statutes have not addressed the application of taxes to General Liability actions and seem to be excluded. Collateral Source are applicable against both past and future damages. Award Valuation Valuation Worksheets are designed to generate a single comprehensive valuation by applying appropriate statutory provisions, and incorporating allocations, adjustments and offsets. Expense ratios and fee rates are applied to produce Net future Award values by element, net past damages and net lump sums. Initial monthly payments are calculated in line with the statutes. In the event that interest is to be applied, the report is expanded to reflect the various levels of discounting, if any, and the various levels of interest. New York 50B Verdict Worksheet This worksheet allocates $250,000 in lump sums across the elements of future loss, treats future Loss of Services and Loss of Consortium as lump sums, applies discount rates indexed to the 10-Year Treasury rates and applies the negotiated fee rate. The Original 50B Valuation Worksheet This worksheet allocates $250,000 in lump sums across the elements of future loss, treats future Loss of Services and Loss of Consortium as just that, applies individual discount rates for each element and applies the negotiated fee rate. Indexed New York 50B Valuation Worksheet This worksheet allocates $250,000 in lump sums across the elements of future loss, treats future Loss of Services and Loss of Consortium as just that, applies individual discount rates for each element and applies the negotiated fee rate. The Valuation Summaries, Negotiation Worksheets, periodic payment and discount payment schedules are contained on Element future Awards together with individual adjustments, offsets and allocations are documented on the Negotiation worksheet. The opening amounts agree with the initial amounts listed on the Valuation Summaries, and the Net Discounted Values also agree with the Valuation Summaries. The detail proves out the Summary. Excluding the impact of Collateral Source offsets, the total of the discounted annual payment schedule by element agree with the Net Discounted values. If expenses and fees are allocated against an element's discounted value prior to applying the value of any offset, the total of the discounted annual payments will closely agree with the Net Discounted values. Flexibility The valuation can be directly and quickly adjusted
The changes are reflected on an updated Summary and shown on a side-by-side comparison of different Award scenarios. The basic valuation is updated only on selection of an alternate scenario, at which time the Negotiation Worksheet and future payments schedules are updated. Interest is directly and quickly applied to the Valuation, together with the components of any discounting associated with wrongful death actions or bifurcated personal injury verdicts, and interest associated with pre-verdict, pre-judgment and pre-payment interest. Service and Support We provide information, the valuation solution together with testing of alternate scenarios, and the documentation to support the validity of any valuation. Solutions The valuation solution is provided in three ways.
We are prepared to provide training and materials for users, at a negotiated price plus out-of -pocket costs. We will provide support on an ongoing basis. Case licensing of Award and Valuation Systems.We will provide an ID and Password to access the system for a given case. Support on use of the system will be charged on an hourly rate basis. |
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