Class Actions and Class Certification

Valuation of Individual and Class Action Damages

Valuation of Individual and Class Action Damages

Claims for damages in mass torts and product liability cases can be quite varied. Some examples include medical costs, lost wages, pain and suffering; fear of injury; loss of use or loss of consortium; replacement cost; incidental costs of recall; diminution in value; and medical monitoring. In some cases, damage claims are associated entirely with historical losses, in others future losses may also arise. Forecasting techniques (see Claim Forecasting) must be used to estimate the timing and extent of future losses. However, these techniques may also be needed to estimate the size of a representative class or to predict how many more individual claims will be filed before the statute of limitations has run.

NERA employs empirical analysis to estimate damages for large groups of claims whether filed individually or as a class. The empirical basis for such valuation depends on the nature of the claim. However, valuation often depends on developing data on the salient attributes of the claims that are likely to affect losses. These attributes will include characteristics of the claimants and exposure to or use of the products or hazards involved.
 
For some elements of damage, historical claims experience provides a basis to estimate expected future costs. For example, pain and suffering awards can be estimated from historical verdicts and medical monitoring costs can be estimated with reference to medical monitoring programs established in other cases.

In cases where losses are associated with marketable assets such as real estate (e.g., drywall litigation) or automobiles (e.g., major product recall litigation), it may be possible to quantify damage claims to estimate diminution in value claims. For example, diminution in value of recalled vehicles can be analyzed using data on vehicle demand. Event study and time series analyses are also useful to measure changes in historical blue book prices coincident with a recall. While the immediate impact of a recall may be evident from contemporaneous data, the historical experience of other recalls may provide evidence of a subsequent expected recovery in resale value. Econometric techniques can be used to measure the value to consumers of vehicle attributes, which may be useful to distinguish an effect of a correctable defect from the impact of a recall on corporate reputation or brand value.

Name Title Location Phone Email
Lucy P. Allen Managing Director New York City +1 212 345 5913 lucy.allen@nera.com
Dr. Christian Dippon Managing Director
Chair of NERA's Global Energy, Environment, Communications & Infrastructure Practice
Washington, DC
San Francisco
+1 202 466 9270
+1 415 291 1044
christian.dippon@nera.com
Dr. Hiroaki Ishigaki Managing Director Tokyo +81 3 3500 3295 hiroaki.ishigaki@nera.com
Dr. Vinita Juneja Managing Director
Chair of NERA's White Collar, Investigations and Enforcement Practice
New York City
London
Toronto
+1 212 345 3148
+44 20 7659 8618
+1 416 868 7314
vinita.juneja@nera.com
Dr. Denise Neumann Martin Managing Director New York City +1 212 345 5296 denise.martin@nera.com
Dr. Faten Sabry Managing Director
Bankruptcy Practice Chair
New York City
London
+1 212 345 3285
+44 20 7659 8618
faten.sabry@nera.com
Bradley A. Heys Director Toronto
New York City
+1 416 868 7312
+1 212 345 2691
brad.heys@nera.com
Dr. Jordan Milev Associate Director New York City +1 212 345 5516 jordan.milev@nera.com
Robert Patton Associate Director Toronto
London
New York City
+1 416 868 7318
+44 20 7659 8620
+1 212 345 3269
robert.patton@nera.com
Bryan Ray Associate Director White Plains, NY +1 914 448 4004 bryan.ray@nera.com
Raymund Wong Associate Director New York City +1 212 345 9361 raymund.wong@nera.com
Dr. Airat Chanyshev Senior Consultant New York City +1 212 345 7336 airat.chanyshev@nera.com
Mark L. Berenblut Affiliated Consultant Toronto
New York City
London
+1 416 868 7311
+1 917 475 0020
+44 20 7659 8644
mark.berenblut.affiliate@nera.com
Todd Morrison Affiliated Consultant Washington, DC +1 202 466 9213 todd.morrison.affiliate@nera.com
Title Type Author
Expert Analysis: Financial Crisis Anniversary - Trends In Credit Crisis Settlements Published Article By Faten Sabry, Sungi Lee, and Linh Nguyen
Snapshot of Recent Trends in Asbestos Litigation: 2017 Update Report Mary Elizabeth C. Stern and Lucy P. Allen
Securities Class Actions: 2016 Full-Year Review and Mid-2017 Flash Update Published Article By Stefan Boettrich and Svetlana Starykh
Trends in Canadian Securities Class Actions: 2016 Update Report By Bradley A. Heys & Robert Patton
Do Options Backdating Class Actions Settle for Less? -- May 2010 Update Working Paper By Robert Patton and Svetlana Starykh et al.