Forensic Economics You Can Trust
Although COVID-19 is disrupting many businesses, GHME has had no interruptions in providing expert witness services. Our use of Zoom Meetings, Conferencing, and Webinars enables compliance with physical distancing directives. GHME has a long history of employing technology in communications. As an early example, in 2008 live video connection allowed Dr. Mellish to testify from Idaho with real-time cross examination as well as conversation with a Florida Judge. To set up a Zoom Meeting to discuss your latest case, give us a call so we can send you a meeting invitation by email.
Who is Dr. Mellish?
Dr. Mellish is an expert witness specializing in the valuation of loss due to business damages, wrongful termination, personal injury and death. He has been qualified as an expert witness in the majority of the Circuit Courts in Florida and many Federal Courts in various states including FL, GA, AL, NY, TX, CA, US Virgin Islands, and others.
This office has a reputation for providing expert witness consultation at the highest standards. We assist attorneys in identifying areas of damages as well as calculating the present value of future losses including lost wages, benefits, the value of household services, the amount necessary to provide medical care in the future, hedonic damages (value of the loss of enjoyment of lifestyle issues) as well as punitive damages in cases that warrant it. In worker's compensation cases, our reports are often made a part of the fee petition package. We have designed a computer-assisted format for presenting the results of our analysis in the worker's compensation cases. We have also developed a computer-assisted format for calculating the present value of future medical care items required in a life care plan for catastrophic injury cases. These computer assisted formats allows us to keep billing to a minimum by reducing the amount of professional time needed. Please refer to our Services page for a detailed list of services provided.
What does it take to evaluate economic damages?
Quite often attorneys call us to quickly estimate the level of economic damages in an injury or death case. When the attorney can give us a short description of the nature of the injury, we can typically identify the probable damage elements:
- Loss of income or support
- Loss of value of services
- Probable future medical expenses
We can usually provide an estimate in a 5 to 15 minute phone call. We do not charge for such brief consultations. By contrast, a written report requires documentation for underlying data. That is what takes the most time and is billable. Business damages cases are different from personal injury cases when it comes to quick estimates. That said, we can usually describe the type of underlying data that will be needed to estimate business damages in a 5 to 15 minute consultation.
How is COVID-19 effecting interest rates?
After a reaching a high of 2.5% in December of 2018, the Federal Reserve began lowering the interest rate in August of 2019 and continued to lower the rate to 1.75% in October of 2019. The Federal interest rate remained at that level until March 3, 2020 when it was lowered to 1.25% in response to COVID-19 pandemic. The rate was reduced again on March 15th to .25% which is effectively zero. For a better understanding how crises effect the Federal Interest Rate, check out this article by Kimberly Amadeo with The Balance.
How does this effect the future economic losses?
When the interest rate or discount rate is low, the present value of future economic losses will be higher. However, the other element in the present value calculation is the growth rate in wages, or in future medical expenses. When interest rates are low, these other two elements of the present value calculations will also be low. Therefore, the present value will not be substantially different than in a period of high interest rates.
Unemployment Soars amid COVID-19 outbreak:
As a result of COVID-19, 3.28 million workers filed for unemployment in March 2020. Consequently, the unemployment rate soared to 20% after hitting a 50-year low of 3.5% for March 2020. This tremendous uptick comes on the heels of an historic period of US jobs growth in which US employers have added jobs every month for 101 consecutive months.
What is the economic forecast in light of COVID-19 outbreak? Most economist agree that it is too early to determine the total impact of the pandemic on the US economy. However, James Bullard of the Federal Reserve Bank of St. Louis expects unemployment to hit 30% in the second quarter, while Morgan Stanley believes the unemployment rate will average 12.8% during that period. According to the Business Insider, economic forecasts by 7 top financial firms predict that COVID-19 pandemic will plunge the US into a recession.
- Goldman Sachs predicts a record drop of 24% in GDP by second quarter
- Deutsche Bank predicts The worst global recession since WWII
- JPMorgan predicts Recession will rock the US and Europe by July
- Bank of America predicts The US economy has fallen into recession already
- Pacific Investment Management Co. predicts Inevitable recession
- Morgan Stanley predicts that their new base-case is a global recession
- UBS predicts Deep US recession by July with almost a 10% contraction in second quarter
Amid these dismal predictions, the Trump Administration clings to the belief that the American people will overcome these adversities and bounce back with a healthy economy. According to The Hill, the President is "now confidently proclaiming that once COVID-19 pandemic passes, we will have a V-shaped U.S. economic recovery that will quickly return the U.S. economy to its former state of robust health." The Hill article points out this recovery prediction is at best wishful thinking considering the effects of the pandemic are worse than the 2008-2009 experience which took a much longer recovery period than the President is expecting for the current crisis.