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demonstration · economic damages

The same cash flows. A different answer.

Two competent experts can accept identical projections and reach conclusions a multiple apart. This is how, and it takes about thirty seconds to see it.

Damages arguments are usually fought over the cash flows: whether the growth was achievable, whether the comparator was comparable, whether the records support the projection. Those fights are visible and everyone prepares for them. Then the stream gets discounted to present value, and an assumption that rarely gets the same scrutiny quietly does more to the number than any of it. The demonstration below holds the cash flows completely fixed and moves only the discount rate. Watch what happens to the conclusion.

How to read this. These are fixed illustrative streams, not a calculator, and you cannot enter your own figures. Nothing here estimates what any matter is worth, and nothing here is a damages opinion. It demonstrates one mechanism: how sensitive a present value is to the rate used to discount it.

the stream
years

Present value of the selected stream across a range of discount rates
At the rate you selected
 
 
Against the high end of the band
 
 
Net spread
 
 

What this means in a real matter.

The rate is an argument, not an input.

It encodes how certain the but-for world is. A projection already trimmed to near-certain levels, then discounted at a full risky rate, has counted the same risk twice. The reverse combination counts it not at all.

The effect compounds with the horizon.

Move the years control. On a short damages period the rate is a detail. Over a working life or a life care plan it can be the largest single driver of the award.

For growing streams, watch the spread.

A model can pair a defensible growth rate with a defensible discount rate and still embed an indefensible gap between them. Experienced rebuttal experts compute the net spread first and ask whether any economy ever sustained it.

Show the range before the other side does.

An opinion that presents one figure, with no sensitivity analysis, has presented its most contestable assumption as though it were settled. Showing the curve is not a concession. It is control of the frame.

Where does the rate sit in your matter?

Describe the stream and the horizon. The Institute will help you see whether the rate and the projection actually match.

Cournotdiagnostic · not a damages opinion
Tell me about the stream: how long it runs, how certain it is, and what rate has been proposed. I'll help you see whether the rate matches the risk that is actually left in the projection. I won't select a rate or compute a value.