New York 50A Demonstration
All valuation systems share common report formats that track the sequences set out in the statutes. The
system sections include
New York 50A Award Worksheet
New York 50A Verdict Worksheet
Amended New York 50A Valuation Worksheet
Original New York 50A Valuation Worksheet
Original New York 50 Valuation Worksheet Indexed to 10-Year Treasuries
Amended 50A Reports
Original and Indexed 50A Reports
[ To use the demonstrators, click on the link, then select download, and, when the form appears, click
'Clear'.]
New York 50A Award Worksheet.
[To access the Award Demo, when 'Clear' is clicked, a list of choices will appear. Select 'Pre-Award'
and the Award detail will be shown. Elements can be accessed by selecting its number and using
'Recall'. To summarize and extend the Award, use 'Sum up Award' and an array of reports will appear.]
Initial Case and both discrete and periodic Award information is entered at this level, including
The first payment date
Current cost
Inflation from point of loss to first payment if one year or greater
Inflation/COLA applicable after the first payment year
Payment period or occasions and interval (discrete items of loss)
Selection of extended or simple lost or Impaired earnings
Selection of taxes (last taxes paid, avg. taxes paid or tax rate applicable to percent of earnings)
Collateral Source offsets applicable to past and future damages.
The system generates Award elements and totals, and allocates the elements between past and future
damages. When Loss of Services or Consortium are included, the future portion is moved to lump sums. In
addition to Award reports, the system will generate the annual detail for extended Lost or impaired earnings
together with a Summary of the components of lost or impaired earnings.
In wrongful death actions, the system will allocate elements between past damages and lump sums, will offer
the option of excluding Collateral Source offsets, limiting offsets to the past portion or applying them in total,
and will generate an Award that allocates expenses to elements and applies fees to the Award components.
New York 50A Verdict Worksheet.
[To access the Verdict Demo, when 'Clear' is clicked, a list of choices will appear. Select 'Pre-Award'
and the Award detail will be shown. An element can be accessed by selecting its number and using
'Recall'. The verdict sheet options appear on another list that will appear.]
This is an offshoot from the Award worksheet. This takes the basic 'Pre-Award' Choice and produces a verdict
file by eliminating
Collateral Source components.
Tax Components except in 50A Wrongful Death cases
The Award system will generate a verdict file to be used in this section. The list of choices include
A Full Updated Verdict Worksheet. This lists the components of loss, the variables producing the
Award amount and the allocation between past and future damages.
A Full Verdict Worksheet that incorporates the variables and the Awards, but does not allocate
between past and future Damages.
A Basic Verdict Worksheet that includes the variables without the calculated total Award.
Periodic Detail which provides monthly and annual payments by year from the first payment with
annual amounts totaled to the Award and adjusted for amounts allocated to past damages.
Discrete Detail which provides projected payments by expected dates, with payments totaled to the
Award, and adjusted for amounts allocated to past damages. As discrete payments may vary from
the projection, the detail displays both the amounts of past damages and the over/under amounts
associated with the difference between actual and projected payments..
In dealing with extended Lost or Impaired Earnings, the Summary and Detail can be accessed in the
same manner as in the Award Worksheet by selecting the number and 'Recall'. As an alternative, the
system has calculated a single COLA rate that will produce the total payments under the extended
system, and Periodic Detail reflects application of that rate.
Loss elements can be updated for any changes in element variables considered by the jury, and to
allocate/reallocate portions of the Award to past damages. The changes are processed by selecting the
element by number, using 'Recall', making any changes and calculating the award. To allocate, use 'Add' to
calculate and 'Allocate'. 'Apply' replaces the element in the Award.
New York 50A Valuation Worksheets.
[Demos are not offered for valuation systems as their output is displayed in the Reports sections.]
There are three different valuation systems
Amended 50A reflects the calculation of lump sums specified in the statute, the further limitation on
the Pain and Suffering future payment period, and the application of discount rates indexed to the 10-year Treasury.
Original 50A reflects the allocation of $250,000 in lump sums, the original limitation on the Pain and
Suffering future payment period, and the application of individually selected discount rates for the
different elements of loss.
Indexed Original 50A reflects the allocation of $250,000 in lump sums, the original limitation on the
Pain and Suffering future payment period, and the application of discount rates indexed to the 10-year
Treasury.
The worksheets serve the dual purposes of Initial Case and Award entry (if the Award section is not
employed), and valuation of Awards, elements and offsets. As wrongful death actions do not result in any
discounted valuation, the Award section is the only portal for entry of that Award information.
Loss elements can be updated for any additions or changes in element variables. They are accessed with
'Components', the element's number and 'Recall', entering changes use 'Add' and 'Apply'. New elements can
be added by selecting a major category, then an element. 'Select' will provide variables associated with the
element, including
The first payment date
Current cost
Inflation from point of loss to first payment if one year or greater
Inflation/COLA applicable after the first payment year
Payment period (occasions and interval are only applicable in the Award section)
Selection of simple lost or Impaired earnings
There is a separate section for selection and application of taxes (avg. taxes paid or tax rate
applicable to percent of earnings)
There is a separate section for selection and application of Collateral Source offsets.
[In each case, entry at this point limits application to only the future.]
When completed, use 'Add' to calculate and 'Apply' to complete the task. The Valuation sections contain rudimentary reporting, but only to verify the actions taken.
New York 50A Valuation Reports.
[When 'Clear' is used, a list will appear that has 'Simple' and 'Pre-Award'. Upon selecting one, a second
list will appear together with the Valuation Summary. That second list contains the various reports
related to the Summary. Click on the item to select the report. To return to the Summary, click on the
first list. To return to the beginning, use 'Clear']
The Reports sections are designed
To summarize and document the valuation.
[In Wrongful Death actions, future damages are treated as lump sums and the valuation does
not involve application of lump sum rules, any statutory inflation or discounting. As a result,
the summary document is the valuation.]
To alter certain key variables primarily associated with future awards, to show the impact in the
Valuation Summary and to directly compare the effects of different sets of variables.
[To access use 'Alter Variables' and select the appropriate option or options.]
Discount Rate Selection. Amended 50A defines the discount rate, using the 10-Year
Treasury rate in effect on the date of the verdict, as the weighted average of the10-Year
Treasury rate for the first 20Years and two percentage points above that rate for each year
beyond 20 years. Original 50A merely provides for use of "... the discount rate in effect at the
time of the award...". Without further definition or acceptance of 'rate in effect', the average
daily yield on the date of the verdict has come into common use for both Amended and
original 50A.
The only rates in effect are the face rates for each quarterly note issue, in other words,
approximately 40 different rates at any point in time. There are also auction yields, or the rate
based on the amount that the purchaser paid. As there are a number of different 10-Year
Treasury rates/yields that could be selected, or different averages or weighted averages of
auction rates/yields, the system offers the capability of calculating auction averages or
weighted averages for the period from passage of Amended 50A to any specified auction point
and weighting those auction results. Individual auction rates or yields, individual average
monthly yields, or different daily yields can be selected.
If averages are employed, the averages, weighted averages and detail supporting them are
incorporated in a certificate.
First Payment Date Selection. Amended 50A provides that the first payment date for future
damages will the date of the verdict "...(unless some other date is specified in the verdict)...".
The original statute implies that same first payment date by defining present value using the
discount rate in effect at the time of the Award and specifying that payments are in advance.
In the process of reaching resolution, selection of a different first payment date will change the
value of the future Awards.
If some other future date is specified in the verdict, the point of valuation for the element would
presumably be that future date. If the future date is used, the discount rate would be the only
one specified in Amended 50A. Any resulting value would be as of the future date, and to
arrive at a value as of the verdict date, it would have to be discounted a second time. The
initial system incorporates just such a facility.
Collateral Source Offsets are determined independent of the jury verdict. They apply to both
past and future damages. If Collateral Source offsets were included in the Award, the various
components are allocated between past and future damages. Offset payments related to Lost
or Impaired Earnings can be deducted from total lost or impaired earnings for purposes of
calculating taxes.
Options exist to eliminate the calculated tax impact of offsets from past and future Lost or
Impaired Earnings and/or add back the tax impact to past and future taxes.
Application of Taxes. Except for Wrongful Death, taxes are determined independent of of
the jury verdict. Taxes apply to both past and future Lost or Impaired Earnings, and as
mentioned above can be adjusted for Collateral Source offset payments.
Options exist to eliminate taxes or to adjust calculated tax rates in 1/4 of 1% increments or
decrements.
Allocation of Expenses and Fees to Collateral Source Offsets. Once expense and fee
rates are determined, they are allocated against past damages, lump sums and discounted
future damages. If the allocation to discounted future damages occurs before application of
the discounted value of Collateral Source offsets (In effect, reducing the value of the Collateral
Source offsets), the elements net future damages will agree closely with total of annual
discounted values adjusted for annual Collateral Source offsets.
An option exists to apply or remove the adjustment for Collateral Source offsets.
When any or all desired changes are entered, 'Show Impact' will produce a Summary that reflects
those changes. 'Compare' will appear and, when used, will yield a side-by-side comparison of the
changes by iteration. 'Record' will change the data base and, if saved will record the changes to the
file.
To apply Award Interest and show the impact on the Valuation Summary.
[To access, use 'Award Interest' and select the appropriate option or options.]
In Wrongful Death actions, future damages are not discounted but treated as lump sums. In these
cases, the Award file is transferred directly to the Report Section for calculating and allocating expenses and fees to produce a Net Award
and provide a Summary report.
Interest is applied from the event of loss
(death), with somewhat different treatment for different components
of loss.
Lump Sums (including future damages) are first discounted back to the date of death before
pre-verdict interest is applied.
Past Damages are discounted back to the date that each payment was made or was due. In
the alternative, a weighted average date for all past damages can be employed. [The Awards
worksheet calculates such a date]
Pain and Suffering. A strong case can be made its treatment as a Pecuniary Loss to which
pre-verdict interest is to be applied, and, since it ends with death, it should not be discounted.
System options are to include or exclude in calculating pre-verdict interest, and discount or
not discount before applying interest.
Pre-verdict interest of 9% is applied to the net result. Pre-judgment interest of 9% is applied to the total
undiscounted Award plus pre-verdict interest. Pre-payment interest is applied to the total undiscounted
Award plus pre-verdict and pre-judgment interest.
In Personal Injury actions, pre-verdict interest is applied only in bifurcated cases, or those in which the
liability verdict pre-dates the Award. In that case, the total Award is discounted back to the liability
verdict before interest of 9% is applied.
In the simplest version, Pre-judgment interest of 9% is applied to the total Award plus any pre-verdict
interest. Pre-payment interest is applied to total Award plus pre-verdict and pre-judgment interest.
In the more complex environment where periodic payments are due from the date of the Award verdict,
the interim payments between Award and judgment or Award and payment are made as cash. The
remainder is then addressed through the defendants' offers and guarantees.
The application of pre-judgment and pre-payment interest would then be in two parts.
In the same manner as employed for discounting of past damages in Wrongful Death actions
the interim payments should be discounted back to some average date, and interest then
applied to that interim value.
The total of interim payments should also be discounted back to the Award date, and
deducted from the element's Net Award. Interest is then applied to the remaining Net Award.
Using 'Interim', the system defines the number of interim payments by element, the amounts including
any statutory inflation, an overall interim date, application of interest to interim payments and the
application of interest on the remaining Net Award. The option is activated by selection of judgment,
payment, or those events plus 1 month in the event that periodic payments would not commence for
a month.
Judgment or Payment Work-up ['J-P Workup' ] is a reprise of the Award Summary listing the
allocation of expenses by element, listing Collateral Source offsets, and updating the Award for interim
payments and interest. The various component amounts are detailed and allocated.
To evaluate use of annuities to satisfy the various periodic payment streams. The Structured Settlement
Protection Act provides that annuity costs are to be reported. This information has value only when it is
compared to the remainder of the Net Award allocable to an annuity and the total payments to be made through
an annuity.
[To access, use 'Evaluation' and select the appropriate option or options.]
