Forensic Economics and the Gig Economy
Paper Session
Saturday, Jan. 8, 2022 3:45 PM - 5:45 PM (EST)
- Chair: Kevin E. Cahill, Boston College
Loss of "The Benefit of the Business" Estimating Damages Realistically for the Owner-Worker
Abstract
We build on previous presentations. Gig and other similar earners are startled when they realize their net profit (Line 31 Schedule C) is the basis for their economic damages, not the loss of revenues (Line 1 Schedule C). We’ve also found that some plaintiff attorneys are shocked when they realize the value of a claim is much lower when the measure is net profits rather than total revenues. To that end, we present several concepts that attorneys and their clients need to grasp. These concepts are (i) source of profit, (ii) loss of net profit versus the loss of wages, (iii) the relationship between physical impairment and a claim for the loss of net profits, (iv) loss of lifestyle value, and (iv) the loss of psychic value of the business. We outline several suggestions for attorneys as they assess the value of a case. Think of these suggestions as to the “upfront work” attorneys need to do to make their claim for economic damages for a client who is a “gig, or similar worker.”Accounting Advice for Calculating Owner-Worker Damages
Abstract
A CPA offers advice to forensic economists on how to calculate owner-worker damages. An exploration of how existing accounting and tax reporting techniques can be used to move beyond the standard measure of the "loss of net profits" as a measure of economic damages if that is possible.Discussant(s)
Jennifer Polhemus
,
Precision Research
Dwight Steward
,
EmployStats
JEL Classifications
- K0 - General