Extended New York 50A System - An integrated system for developing and valuing Awards under Article 50A and Amended 50A. The sections are

Award Development [Processes personal injury and wrongful death claims under original and amended New York 50A] - Record and compile case information and Award data by element of loss. The latter includes first payment date, duration of future damages, first payment date and current amount, cost Inflation increase percentage if first payment is more than a year in the future and a separate (Cost of Living) percentage for years beyond the first payment year. Lost or impaired earnings can be a simple projection, as with other periodic elements or an extended projection incorporating different increase percentages for different decades of employment, a complex of bonuses and commissions, a deduction for personal expenses, and treatment of income taxes as a separate deduction.

Discrete items of loss (lump sum payments) can be incorporated either as individual events or as a sequence of discrete events separated by annual periods in excess of a year. (Discrete items are automatically converted to periodic (monthly) events for valuation.)

In addition,

• Taxes can either be past taxes paid, separate local, state and Federal taxes paid in the past 1 to 3 years, or separate local, state and Federal tax rates applied to different percentages of income on either a simple or pooled basis (lower level taxes paid reduce income against which tax is applied at next level).

• Collateral Source offsets can be incorporated into the Award, including first payment dates and amounts, maintenance expenses for the two years prior to loss, continuing maintenance and any COLA normally associated with the loss.

• Update and allocation of elements of loss, taxes (if used) and Collateral Source offsets to past damages. The user may choose to allocate by months since first payment date or by a specific amount, and either maintain or reduce future damages by the amount allocated to past damages. The system will calculate a new future first payment amount based on remaining amounts and the remaining period of loss.

• Summarize the Award to a simple three element (Pain and Suffering, Medical Expense and Economic Loss) Award. The Award file can then move to Valuation.

• In wrongful death cases, 50A provides that the Award is to be valued directly without any discounting or other adjustments. In these circumstances, expenses and fees are applied directly against the Award amount. The result can be carried directly to the Reports sections.

Valuation. [Processes personal injury under original and amended 50A]

Record and compile case information and Valuation data by element of loss. If the Award system is employed, the Award file would contain the data and be utilized by the Valuation. The valuation data includes first payment date, duration of future damages, first payment date and current amount, cost Inflation increase percentage if first payment is more than a year in the future and a separate (Cost of Living) percentage for years beyond the first payment year. Lost or impaired earnings are simple projections, as with other periodic elements.

Discrete items of loss (lump sum payments) can be incorporated either as individual events or as a sequence of discrete events separated by annual periods in excess of a year. Discrete items are automatically converted to periodic (monthly) events for valuation.

• Taxes can either be separate local, state and Federal taxes paid in the past 1 to 3 years, or separate local, state and Federal tax rates applied to different percentages of income on either a simple or pooled basis (lower level taxes paid reduce income against which tax is applied at next level).

• Collateral Source offsets can be incorporated into the Valuation, including first payment dates and amounts, maintenance expenses for the two years prior to loss, continuing maintenance and any COLA normally associated with the loss. In addition, if the Collateral Source offset relates to lost or impaired earnings and taxes are applied against those lost or impaired earnings, an option exists to reduce the impact of taxes for total collateral source payments. In addition, Expenses and fees can be applied against element loss before Collateral Source offset by reducing the value of the offset for expenses and fee.

There are three valuation modules under 50A

• Amended 50A Worksheet that applies the separate rules on Lump sums, and limited application of inflation or COLA, and the application of discount rates indexed to the 10-Year Treasury.

• Indexed 50A Worksheet that allocates the first $250,000 across the elements of future loss, applies inflation or COLA of 4% across all elements of future loss, and the application of discount rates indexed to the 10-Year Treasury.

• The Original 50A Worksheet that allocates the first $250,000 across the elements of future loss, applies inflation or COLA of 4% across all elements of future loss, and individual discount rates are assigned to individual elements of loss.

Valuation Reports [Processes personal injury and wrongful death claims under original and amended New York 50A]

• Amended 50A Reports

• Original and Indexed 50A Reports

Taxes on lost or impaired earnings are calculated in one of four ways.

• •The actual taxes paid in the last year prior to the event of loss.

• •Federal, state and local income taxes paid for the past one to three years.

• •Effective Federal, state and local tax rates applicable to different percentages of income.

• •Pooled rates where taxes at the lower level are deducted from the higher levels of income before taxes are applied to those levels.

If there are collateral source offsets against lost or impaired earnings, the Award element can be reduced by total future offset payments (future payments reduced by continuing maintenance and increased by a COLA rate) to reduce taxes applicable to lost or impaired earnings. The lower taxes are then deducted from the gross unadjusted future lost or impaired earnings.

Past damages can be either a single number or, if Award development is employed, past damages can be damages incident to the loss, and element damages moved to past damages with the passage of time. Past Collateral Source offsets payments are also incorporated into past damages together with any maintenance costs occurring in the two years prior to the event of loss.

Amended 50A first set out the use of discount rates indexed to the 10-Year Treasuries, and they are now generally applied to both 050A and 50B cases, they are calculated as follows,

• •The 10-Year rate for any element of future loss of 20 years or less.

• •The weighted average of the index rate for the first 20 years and two percentage points above the index rate for each year or part year beyond 20 years.

[(rate X 20) +((rate +.02) X (Element Years and (months/12))] /(Element Years and (months/12))

The system calculates an expense rate (expenses/(Past Damages + Lump Sum + discounted future element losses), and applies the rate against the sum of past sums, and the individual discounted future loss elements.

The system calculates a fee rate by totaling Past Damages , Lump Sums and discounted future element losses, all net of litigation expenses. It then applies the statutory scale to the various increments of the total. They are

• •30% of the first $250,000
• •25% of the Next $250,000
• •20% of the Next $500,000
• •15% of the Next $250,000
• •10% of the rest.

The results are then used to calculate an overall fee rate.

Negotiation Worksheet is really a detailed reconciliation from Gross Element Award to element Award Value, and then a reconstruction back to a total Award.

Total Element Award reduced by any taxes (if applicable to the element of loss)

• •Lump sums net of pro-rated litigation expenses
• •Pro-rated Litigation expenses applicable to lump sums
• •Pro-Rated attorney fees applicable Lump Sums

To arrive at a Net Undiscounted Element Award ( agrees with The Summary undiscounted net Award). This is then discounted by the appropriate rate to produce a discounted Award that is then

• •Pro-rated Litigation expenses applying to the discounted value
• •Pro-Rated attorney fees applying to the discounted value
• •The discounted value of the net Collateral Source Offsets (discounted at the same rate as the related loss element)

To arrive at a net element Award. Gross and Net first monthly payments are also listed.

Individual net elements are accumulated into the three major categories of net Pain and Suffering, Medical Expense and Economic loss. They, in turn are totaled to an Overall Net Award.

Collateral Source offsets are then added back, together with the total allocation of expenses and fees to future damages.

The Net undiscounted amounts associated with Award elements are also totaled,expenses and fees allocable to lump sums are added, as well as lump sums. Total taxes are added back and the result is the total Gross Award.

The system then lists the cash values that with which the defense will part, and, if Award updating has been used, a complete listing of past damages an offsets.

Monthly Loss Element and Collateral Source Payments is a listing of individual future monthly payments by year. The monthly payments for Pain are increased by 4% each year. Collateral Source Offsets payments are increased by any COLA increase or for Social Security benefits, 3% a year.

Annual Loss Element and Collateral Source Payments is a listing of individual element future payments per year and part year.

Annual Loss Element and Collateral Source Discount Values is a listing of discounted individual element future payments per year and part year. The element total agrees the element net Award on the Valuation Summary, except for those elements to which Collateral Source Offsets apply. If expense and fee rates are applied against Collateral Source Offsets, the net will fairly closely approximate the Valuation Summary.

Command Buttons activate a series of functions associated with reports. They include

• •File Input (not shown on the Demo)
• •Save (not enabled on Demo)
• •Make an Offer (not enabled on Demo)
• •Receive an Offer (not enabled on Demo)
• •Print. It prints the report on display.
• •Alter Variables
• •Award Interest

• •10-Year Note Index
• •First Payment Date
• •Change Tax Rate
• •Change Offsets
• •Reduce Impact of Collateral Source For Expenses and Fees.

The attorney will be able to save and access files containing the valuations and to access the various reports associated with the simplified calculations. Access will be for a period of approximately 60 days. The attorney may from time to time request extension of that access period. The Burbank Group reserves the right to deny or terminate access to these programs for any reason or no reason, with or without advance notice.

By requesting and using the ID’s and passwords, the user certifies that he/she is an attorney representing the referenced plaintiff, and that the calculators will be employed solely in conjunction with the referenced case. Access to the full calculators can be obtained at cost of $250 per case. The full calculators contain facilities for dealing with valuations by detailed element and/or in simple format, for automatically allocating elements to past and future damages, for establishing offsets and tax impacting Economic Loss elements, and for processing system established valuation files submitted by brokers or advisors, and settlement offers provided by insurers.