Derek W. Aldridge, MA
Derek Aldridge has earned a Bachelor of Science and a Master of Arts degree from the University of Victoria. Prior to working as a consulting economist at Economica, Derek worked with the Government of British Columbia's Ministry of Finance, and as a research assistant at the University of Victoria.
He has worked for Economica since 1995. In addition to writing reports, he has developed several spreadsheet applications which are used in many of our day-to-day calculations. Derek has also made use of his interests and experience with computers and the Internet to develop and maintain our Web site.
His interests outside of Economica include listening to music, following news and politics, watching movies, playing hockey, downhill and cross-country skiing (though not often, unfortunately), and playing with his two children.
Derek's curriculum vitae (a pdf document)
Expert Witness articles that Derek has authored or co-authored:
(Reverse chronological order – most recent articles at the top)
- Examination of Expert Witnesses
The Discount Rate Revisited (Spring 2008)
- Spring 2008 Expert Witness (13.1)
- This article reports on our latest survey of discount rates. We conclude that no changes to our existing discount rate assumptions are warranted, though a reduction in our long-term rate may be necessary in the future if the observed long-term rates remain significantly lower than our assumed rate.
Using the HALS/PALS data sets to
estimate a loss of income
- Spring 2007 Expert Witness (12.1)
- In the article Derek Aldridge discusses the potential usefulness of Statistics Canada’s HALS/PALS disability statistics when attempting to estimate a person’s loss of income. His opinion is that while one can use these data sets to predict a loss of income, in most cases these predictions are not helpful for our purposes.
The Discount Rate Revisited (Summer
- Summer 2006 Expert Witness (11.2)
- In this article Derek Aldridge reports on our latest survey of discount rates, and outlines the revisions we have made to our standard assumptions. We conclude that some small changes to our short-term discount rate assumption are warranted, though we have not changed our assumptions concerning long-term rates. The overall impact on our calculations will be negligible in most cases.
Estimating the Impact of Mid-Career
- Summer 2005 Expert Witness (10.2)
- In this article we investigate an issue we have not seen raised anywhere else in the literature on personal injury damages: When an individual is injured in their 30s or early 40s, and has to retrain for a new career, will that individual begin in that career at a salary equivalent to those of individuals with the same age as the plaintiff? Or will the plaintiff’s starting salary be more similar to those of younger individuals in the new career – perhaps 25–29 year-olds? The authors present information from a recent study that investigated this question; and comment on the use of this study for personal injury cases.
The Discount Rate Revisited
- Summer 2005 Expert Witness (10.2)
- In this article we review the recent evidence – both statistical and theoretical – concerning the discount rate (or real rate of interest). We review a number of different interest rates for each quarter since 1995 and find that every series has trended downward virtually continuously over the entire period. We then review the theoretical arguments that have been put forward to explain why this trend has been observed; and ask whether it is better to base a forecast of future rates of interest on the rates that are currently being observed or on averages of historical rates. We conclude that it would be inappropriate to rely on historical figures and instead we recommend use of multiple rates, based on the rates currently available for a variety of short- and long-term government bonds.
Selecting the Discount Rate –
- Spring 2003 Expert Witness (8.1)
- This article extends the work done by us in issues 5(3) and 6(4) of The Expert Witness, we conclude that it would be appropriate to revise our existing 2½ and 3½ percent two-part forecast of real interest rates. We propose to use a rate of 2¼ percent for the first five years of all calculations. For all subsequent years we propose to use a rate of 3¼ percent.
- Winter 2002 Expert Witness (7.3)
- In this article Derek Aldridge briefly discusses the concept of management fee awards for injured plaintiffs. He addresses the possibility that, while a plaintiff will incur additional costs when using a financial manager, she may also earn a higher return on her investments.
Millott (Estate) v. Reinhard
– Reconciling “dependency” claims under
FAA with “estate claims” under SAA
- Summer/Autumn 2002 Expert Witness (7.2)
- In this article Derek Aldridge considers one of the most interesting findings from a recent court decision. The issue concerned how to reconcile “dependency” claims under the Fatal Accidents Act with “estate claims” made under the Survival of Actions Act. In the Millott decision, it appears that if a dependant/heir’s share of the estate’s loss of income claim (under SAA) is greater than his loss of dependency on the deceased’s income (under FAA), then he is awarded the SAA amount, but he can also receive any claim for loss of services under FAA.
The awarding of costs and payment of
legal fees in a case brought before the Court: is there a
- Winter 2001 Expert Witness (6.4)
- This article shows that there may be a potential injustice due to the tax treatment of an employee-plaintiff versus a corporate-defendant. We show that the costs imposed on a losing employee-plaintiff impose a greater burden than the same level of costs imposed on a losing corporate defendant. This is because the employee-plaintiff must such pay costs with after-tax dollars, but the corporate defendant can use before-tax dollars.
Selecting the Discount Rate –
- Winter 2001 Expert Witness (6.4)
- In this article the consultants at Economica have combined to review the most recent information concerning the “discount rate;” that is, the rate of interest at which plaintiffs are assumed to invest their award.
The Deduction for “Expenses
Related to Earning Income” in Rewcastle
- Autumn 2001 Expert Witness (6.3)
- In this article Christopher Bruce and Derek Aldridge discuss the court’s decision in the recent case of Rewcastle v. Sieben. The case concerned an estate claim brought under the Survival of Actions Act. In his decision, Justice Hutchinson introduced a new method for calculating the deduction for “expenses directly related to earning income.” In their article Dr. Bruce and Mr. Aldridge summarise Justice Hutchinson’s method and comment on its broader applicability.
Estate Claims Following the Appeal
Court Decisions in Duncan and Brooks
- Spring 2001 Expert Witness (6.1)
- In this article Derek Aldridge, investigates a number of issues concerning the valuation of estate claims under the Survival of Actions Act. These issues arise from two recent decisions of the Court of Appeal, in Duncan v. Baddeley and Brooks v. Stefura.
The Impact of Disability on
Earnings: Results of the Health and Activity Limitation
- Spring 2000 Expert Witness (5.1)
- This article
presents some information from Statistics Canada’s
Health and Activity Limitation Survey (HALS). Although
HALS was one of the most comprehensive surveys ever
conducted on the effects of disability, Statistics Canada
has chosen to publish results from that survey in a form
that is not of great value to litigators. Accordingly,
HALS has become one of those sources that is referred to
far more often than it is employed.
Economica has obtained access to Statistics Canada’s electronic records of over 100,000 individual questionnaires from HALS. This has allowed us to estimate income and education levels for each of four levels of disability, for both males and females, cross-categorised by four levels of education and four age groups. In their article, Christopher Bruce, Derek Aldridge, and Kris Aksomitis report the statistics derived from this process. Although the statistics reported there are too aggregated to allow practitioners to estimate damages in specific cases, they can act as a check to see whether the damages calculated in any particular case are "reasonable."
Fatal Accident Dependency
- Winter 1999 Expert Witness (4.4)
- In this article Derek Aldridge examines the difference between using the sole- and cross-dependency approaches when estimating the loss of income dependency following a fatal accident. Chris Bruce wrote about this issue three years ago in the Expert Witness (Volume 1, Number 4). Derek’s article emphasises the specific differences between the calculations in the two different approaches.
The MacCabe Judgment: Allowing the
Use of Earnings Statistics for Males When Estimating the
Future Income of a Female
- Autumn 1998 Expert Witness (3.3)
- In this article, Derek Aldridge explains how the MacCabe judgment is important from the economist’s view. What does the judgment imply about future cases involving injured or deceased females? There are many questions unanswered.
Software Review: Personal Injury
Damages Partner (Carswell)
- Summer 1998 Expert Witness (3.2)
- In this article Derek Aldridge reviews a CD ROM titled Personal Injury Damages Partner, available from Carswell. The CD contains a searchable collection of full text and digest summaries of personal injury cases.
Unresolved Issues in the Valuation
of Estate Claims Under Survival of Actions
- Spring 1998 Expert Witness (3.1)
- In this article Derek Aldridge expands upon previous articles in our newsletter which have arisen from the Duncan v. Baddeley court of appeal decision. He raises several questions concerning the calculation of losses in light of this decision, and suggests that it may not be possible to resolve these issues until it is determined whether the Court's goal is one of compensation or deterrence.
Using Male Earnings Data to Forecast
the Future Income of Females
- Autumn 1997 Expert Witness (2.3)
- In this article Derek Aldridge deals with the subject of the "wage gap" between men and women. He discusses the rationale used to explain this difference in earnings and why it might be inaccurate to base a prediction of the future earnings of young women on women’s historical earnings. He suggests that there is considerable support for the use of male earnings data which have been adjusted to reflect the extent to which a female’s career path may differ from that of the average male.
The Income Tax Gross-Up on a Cost of
- Winter 1996 Expert Witness (1.4)
- In this article Derek Aldridge and John Tobin discuss the various factors that affect the size of the tax gross-up on a cost of care award. Factors range from the plaintiff's taxable income (including investment income from the award), to the proportion of the tax-creditable expenses, to the time path of the consumption of his/her cost of care award. Depending on these various factors, it is clear that the gross-up may be significant, thus making this calculation very worthwhile.
Adjusting Claims for Hours Devoted
to Household Chores
- Summer 1996 Expert Witness (1.2)
- In this article Derek Aldridge reports on evidence which suggests that individuals hired to perform housework may be more productive than most householders. Hence, the number of hours which must be replaced may be less than the number a plaintiff formerly performed.