Calculating Damages for Loss of Household Services

Household services loss calculations are essential to any personal injury case or wrongful death claim. When an injured or deceased party can no longer contribute to regular household production, they or their family have the right to seek compensation for the cost of hiring someone to perform these services for them. To calculate accurate lost household services damages, each party will need the assistance of expert witnesses, including forensic economists, vocational experts, and medical experts.

If you are a plaintiff or defendant requiring economic damage calculations and expert witness testimony regarding lost household services, contact The Knowles Group to schedule a complimentary case consultation today.

What are Household Services?

Household services refer to the everyday tasks, chores, and responsibilities required to maintain and manage a household’s upkeep, cleanliness, and functioning. These services are essential to economic damage calculations in personal injury and wrongful death cases.

Expert forensics often refer to data from The Dollar Value of a Day by Expectancy Data when calculating lost household services damages. The Dollar Value of a Day breaks household services into primary service categories. Each of these primary categories is broken down into many subcategories, which are further broken down into tasks performed to complete each subcategory. The primary categories include

• Household Production involves the various household tasks and activities that individuals undertake to maintain and manage the home. This includes cleaning, cooking, laundry, child care, home maintenance, gardening, and other activities.
• Caring and Help involves the assistance and support an individual provides as a caretaker within their household, including childcare, elderly care, assistance to persons with disabilities, and emotional support.
• Personal Time involves the time an individual allocates toward their well-being and personal fulfillment through personal activities, relaxation, hobbies, self-care, socialization, and personal development.
• Leisure involves dedicated time spent on activities for leisure and entertainment purposes, including recreational activities, hobbies, and pursuits that provide enjoyment, relaxation, and personal fulfillment.
• Work and Education involve time and effort allocated towards employment or educational pursuits within the household setting, including remote work, online learning, studying, household children’s education, etc.

What is the Average Amount of Compensation for Lost Household Services?

The compensation awarded for lost household services depends on various factors, including the difference between the amount of time the plaintiff spent on each service before and after injury or death, the plaintiff’s life expectancy, and other factors. Due to these variables, determining an average amount of compensation is nearly impossible. However, the U.S. Bureau of Labor Statistics has provided some enlightening data estimating that the average adult in the United States makes an annual contribution of approximately $14,000 to their household through Household Services.

Is There A Formula for Calculating Damages for Loss of Household Services?

When calculating damages for lost household services, expert forensics must consider a range of factors that influences the final calculations, including comparing the specific services the plaintiff performed pre-incident vs. post-incident, how the nature of those services may change over time, and the diminishment in ability to perform those same services as the plaintiff ages. Using this information, an expert forensic refers to data sources, such as The Dollar Value of a Day, the American Time Use Survey, and BLS Occupational Employment Statistics, to calculate the average time spent on each service and determine an estimated replacement cost for each category.

Due to the complexity of these calculations, there is no simple formula for calculating lost household services. However, a highly simplified formula is as follows

Loss of Household Services = Value of Services Performed Pre-Incident – Value of Services Performed Post-Incident

Household Work Hours & Dollar Value by Age & Gender (2020)

Table compiled using data from Dollar Value of a Day, 2020 report

 

Hypothetical Example

In 2014, Jen suffered catastrophic injuries from a car accident. She is a 50-year-old woman who, according to U.S. Life Tables, has a life expectancy of 33.2 years. To calculate the total damages for loss of household services, an expert forensic utilizes information from Table 1 of The Dollar Value of a Day based on her gender and age.

From age 50-54, the average weekly hours spent on household services per week is 22.93 at $13.27 per hour, valuing annual household services during this period at $15,823. The expert forensic continues these calculations for the duration of Jen’s lifespan and arrives at a grand total loss of household services of $522,146.

Factors to Consider When Calculating an Individual’s Ability to Perform Household Services

When calculating damages, expert forensics must consider various factors influencing an individual’s ability to perform household services. These factors include but are not limited to, the following

• Life Expectancy
• Change of Service Requirements
• Changes Before Trial
• More or Less Time Spent
• The Difference in Hourly Requirement

Life Expectancy

The plaintiff’s life expectancy is critical in determining the economic impact of the loss of household services. A longer life expectancy increases the financial value of the loss, while a shorter life expectancy decreases the value.

Change of Service Requirements

Over time, the household services the plaintiff performs will change. For example, at the time of the incident, they may provide significant care and help to their young children. However, once their children reach adulthood, the care and help required will decrease significantly.

Changes Before Trial

Often, a plaintiff’s condition can change, for better or worse, between the time of deposition and when the case enters litigation. If any change occurs, it must be considered before reaching a fair settlement. For example, if the plaintiff is paralyzed and their mobility improves before trial, the total loss of household services may decrease.

More or Less Time Spent

Sometimes, a plaintiff will report spending considerably more or less time performing particular household services. In these cases, the amount of time spent, or lack thereof, must be reasonably justified to perform accurate calculations. For example, a plaintiff who reports an unusually high amount of time spent caring and helping who later discloses they have a child with autism.

The Difference in Hourly Requirement

When a plaintiff cannot perform a task, the cost of a purchased service likely will not require the same number of hours to complete. For example, if the plaintiff spent five hours per week cleaning, a professional cleaning service may take much less time to complete the same task. This difference in hourly requirement must be considered to reach an accurate damage total.

How The Dollar Value of a Day is Used in Loss of Household Services Calculations

The Dollar Value of a Day (DVD) is an annual report published by Expectancy Data and the primary source of values used by forensic economists using The Replacement Cost Method. This system uses data from the US Census Bureau’s American Time Use Survey to calculate the weekly average time spent on various household services and the Bureau of Labor Statistics Occupational Employment Statistics to estimate an hourly replacement cost for each service category.

The DVD separates the hours spent based on different demographics, including gender, marital status, employment status, and the number of children. These averages are generally more reliable than personal recollection based on documented over-reporting of time spent in direct question surveys.

Methods Used to Calculate Lost Household Services

Three approaches are utilized to quantify household services: the replacement cost method, the market or opportunity cost method, and the housekeeper method. While forensic damage experts employ all three techniques, each process is not equally acceptable.

The Replacement Cost/Specialist Cost Method

The Replacement Cost or Specialist Cost Method calculates the expense of hiring a professional to replace the household services provided by the injured or deceased person. It considers market rates for skilled individuals and requires evidence and expert testimony to determine the cost of hiring a replacement for the tasks involved.

The Market/Opportunity Cost Method

The Market or Opportunity Cost Method evaluates the lost opportunity value for paid employment or income-generating activities instead of household services. It considers the individual’s earning capacity and calculates potential income that could have been earned during the time spent on household services, serving as the basis for compensation.

The Housekeeper Method

The Housekeeper Method assesses the value of lost household services based on prevailing rates for hiring a housekeeper for ongoing household services. It determines a reasonable hourly rate and multiplies it by the anticipated hours per week or month the person would have spent on household tasks. This approach may be employed when the individual has primary responsibility for general housekeeping.

Your Personal Injury or Wrongful Death Case Will Benefit from Our Network of Expert Witnesses

The Knowles Group has been calculating economic loss and providing expert witness testimony for the legal community since 1979. Contact us today if you are a plaintiff or defendant in a wrongful death or personal injury case involving lost household services to discuss the damage calculation services and our network of expert witnesses across the nation, including vocational and medical experts, that we can connect you with.