by John Darer CLU ChFC CSSC RSP CLTC
Simple math illustrates that during time periods where there is an inverted yield phenomenon, it amplifies the present value of New York jury verdicts for pain & suffering in excess of the nominal amount of the verdict
- At the time of publishing the 10 Year US Treasury rate is 2.28%
- Pain & Suffering Gets crunched into 10 years*
- The statutory growth rate is 4%
- Growth rate minus discount rate is 4 minus 2.28 which equals 1.72. The growth rate exceeds the discount rate so we have a net growth rate.
- $1,000,000 inflated by 1.72% for 10 years is $1,165,888.89, a difference of $165,888.89
- When you add 9% statutory interest to the equation there is a significantly different picture to the nominal verdict numbers.
Having an expert who understands New York structured judgments can be invaluable to New York based attorneys and their clients at New York City mediations (cases pending in Bronx, Kings, Richmond, New York and Queens counties) and mediations in Long Island, Westchester, Brooklyn, Syracuse, Binghamton and other parts of New York state.
Note that in an actual Article 50-B calculation there would need to be an accounting for any applicable collateral sources and applicable offsets.
*for the purpose of this post, the illustration is for a general liability case. The calculation varies for a case involving medical, dental or podiatric malpractice