Date: Fri, 25 Jul 2003 09:28:31 -0300 (ADT)

From: Jennifer Bankier

Subject: Luntz/Neyers Debate

Re Lewis Klar's raising the issue of whether we should pay everyone an average loss of income amount, to avoid redistributing from the poor to the rich:

A more sophisticated version of this issue which has been and will continue to be litigated is re the influence of social discrimination, past or present on calculation of loss of future earnings.

This has been litigated, and will continue to be litigated with respect to the use of separate, sex-based earnings tables for loss of future income.

Elaine Gibson in writing about this problem, suggested that courts would not calculate loss of income for aboriginal people, for example, taking into account all the harm that colonialism has done to aboriginal people as a group, but another scholar found evidence that the courts are making exactly that kind of adjustment to damage awards to aboriginal people.

Another example of the issue is the assumption, especially in the case of children too young to have actual evidence of what their career will be that the children will follow the same career path as the parent of the same sex. This assumes that people are locked into their social class, an assumption that is not in fact correct with respect to social mobility. (For example, for each family line, there will be a first person to go to university. In my family's case that was my grandfather on my mother's side and my father on the paternal side.)

Furthermore, insurance is itself a kind of averaging. The male earning tables average all men, for example, sometimes all men in particular subcategories of men. The female earnings tables average all females (perhaps with subcategories.) It is not a particularly radical step to suggest that averaging without regard to gender with respect to all plaintiffs is appropriate. The more radical step is to argue that the male average tables be used for both men and women in order to eliminate the effects of discrimination (which I would support but others may not).

A similar analysis can be done with respect to whether the averages used with respect to future income should be broken down/adjusted by race, or whether one should use average future earning statistics for all people, rather than just the data for all people from the same occupational category of the child's parent of the same gender.

In other words, averaging already plays a legitimate role in insurance (with the issue being the appropriateness of breakdowns into subcategories) with respect to the assessment of future loss damages. The issue is whether the present practices need to be adjusted to use different forms of averaging.

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