A Georgia wrongful death claim seeks the “full value of the life” of the person who died. A central part of that value is the income the deceased would likely have earned over the remaining course of life. Calculating future earnings requires looking decades into the future, which raises two technical questions: how to account for the way wages tend to rise over time, including through inflation, and how to convert a future stream of income into a single present-day figure. This guide explains how Georgia law approaches those questions.
The Full Value of Life Standard
Georgia’s wrongful death statute measures recovery by the full value of the life of the deceased, considered from the point of view of the deceased rather than the survivors. Georgia courts describe this value as having two components.
The economic component covers losses that can be measured in money, most notably the income and benefits the deceased would have earned. The intangible component covers the value of the experiences and relationships that make up a life and is not reduced to a precise dollar formula.
Inflation and future earnings analysis applies primarily to the economic component. The intangible component is assessed differently and is left to what Georgia courts call the enlightened conscience of the jury.
Projecting Future Earnings
To estimate the economic value of a lost life, the analysis generally begins with the deceased’s earning history and characteristics, such as age, occupation, education, and work history. From there, a projection is built of what the person would likely have earned over the remaining work-life expectancy.
A realistic projection does not simply assume that wages would have stayed flat. Over a working lifetime, earnings tend to change for several reasons. General wage growth and inflation tend to push nominal wages upward over time. In addition, individuals often experience career advancement, promotions, raises, and increased productivity as they gain experience. A projection of future earnings therefore commonly incorporates expected growth in the earnings stream rather than treating current pay as fixed.
These projections are typically supported by expert testimony, often from a forensic economist who applies recognized methods and relevant data. The opposing party may present its own analysis, and the jury weighs the competing evidence.
A Distinctive Feature of Georgia Law
Georgia’s approach to the economic component of wrongful death damages differs from that of many other states in an important respect. Georgia measures the full value of the life from the perspective of the deceased, and in doing so it generally does not deduct the deceased’s own personal living expenses or personal consumption from the projected earnings. It also does not reduce the figure by the income taxes the deceased would have paid.
This is different from the rule in many states, where future earnings are reduced by the amount the deceased would have spent supporting themselves, on the theory that survivors only lost the surplus. Georgia’s full-value-of-life concept measures the loss to the life itself, so the gross earnings figure, rather than a net figure after personal consumption, is generally the starting point for the economic component.
Reducing Future Earnings to Present Value
Because a wrongful death award is paid now, while the lost earnings would have been received over many future years, the law requires future economic losses to be converted into a present value. A dollar received many years from now is worth less than a dollar today, because a dollar in hand can be invested and earn a return. Present value calculation discounts the future stream to reflect this.
Georgia addresses this in O.C.G.A. § 51-12-13. That statute provides that, in determining the present value of future medical expenses, living expenses, lost wages, or other economic damages, the trier of fact may reduce them to present value based on a discount rate of five percent, or any other discount rate the trier of fact deems appropriate. The statute therefore supplies a default reference rate of five percent while leaving the jury free to apply a different rate if the evidence supports it. The statute also provides that it should not be construed to allow evidence of the cost of a specific private investment product, such as an annuity.
How Inflation and Discounting Interact
Inflation and present-value discounting pull in opposite directions, and a sound calculation accounts for both.
On one side, expected wage growth, including inflation, tends to increase the projected future earnings figure, because wages are generally expected to rise over the remaining work life. On the other side, the discount rate reduces that future stream to present value, because future dollars are worth less than present dollars.
Economists handle this interaction in different ways. One approach projects earnings in future, inflated dollars and then discounts them back using a discount rate that itself reflects expected returns. Another approach works with a net rate that already blends the effects of expected wage growth and the discount rate. Georgia’s statute supplies a default discount rate of five percent but allows a different rate, which gives the jury room to consider the evidence on growth and discounting presented by the parties. Because reasonable economists can differ, the inputs and methods are frequently the subject of competing expert testimony.
The Role of the Jury
Although the economic analysis is technical, the final determination of damages in a Georgia wrongful death case rests with the jury. The jury hears the evidence on earning capacity, expected growth, work-life expectancy, and the appropriate discount rate, and it then determines the economic component of the full value of the life. The jury separately assesses the intangible component, which is not subject to present-value reduction and is measured by its enlightened conscience. The two components together make up the full value of the life.
Conclusion
Georgia wrongful death damage calculations account for future earnings by projecting what the deceased would likely have earned over the remaining work life, commonly including expected wage growth and inflation rather than assuming flat earnings. Distinctively, Georgia generally measures the economic loss without deducting the deceased’s personal consumption or income taxes, because the standard is the full value of the life. Future economic losses are then reduced to present value, and O.C.G.A. § 51-12-13 supplies a default discount rate of five percent while allowing the trier of fact to use another rate. The jury weighs the competing evidence and sets the final figure.
Disclaimer
This article is provided strictly for general educational and informational purposes. It is intended to explain how Georgia law works as a matter of public legal education, and it does not constitute legal advice, a legal opinion, or a recommendation about any particular course of action. Reading this article, or contacting the website on which it appears, does not create an attorney-client relationship between the reader and any law firm, attorney, or author.
The law changes over time. Statutes, regulations, court rules, and judicial decisions discussed here may have been amended, repealed, superseded, or reinterpreted after the date of publication, and citations to specific code sections or cases reflect the law only as it was understood when this article was written. The application of any legal principle also depends heavily on the specific facts and circumstances of an individual matter, and outcomes vary from case to case.
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