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54 Geo. L. J. 1131 (1965-1966)


At the turn of the century the United States Supreme Court held that a common-law action could not be maintained in a court of the United States against a Mexican railroad, incorporated in Colorado, for the wrongful death in Mexico of an American switchman. Mr. Justice Holmes, writing for the majority, said that the American court should refuse to administer a Mexican statutory rule of damages which provided compensation in the form of scheduled, periodic payments instead of the lump-sum award traditional to American jury verdicts.

While the case is of primary interest for students of conflict of laws, it neatly contrasts two wholly different remedies in computing damages for future loss: the Mexican periodic payment based on what does happen in the future, and the American lump-sum payment based on what may happen in the future. The Supreme Court opined that justice to the defendant would not permit the substitution of a lump sum provided under Texas law for the periodic payments which the Mexican statute required. As Holmes put it: "[T] o reduce a liability conditioned as this was to a lump sum would be to leave the whole matter to a mere guess." Yet, is it not true that every lump-sum verdict is in a sense predicated upon a chain of guesses or, more accurately, educated estimates? Future loss to a plaintiff cannot be computed with precision when the elements of loss are variable and unknown. Plaintiff may or may not require future surgery, he may or may not require future nursing care, his future earnings may or may not decrease, and finally, plaintiff may live to his expectancy, exceed it, or never realize it. Each element of future damage is necessarily based upon the jury's prediction as to what will occur in the future.

It is interesting that more than fifty years have passed since Holmes' observation, and no perceptible chorus for reform has been heard to urge greater precision in computing awards of damage for future expense and future loss.

Since the cardinal principle of damages in Anglo-American law is that of compensation for injury caused plaintiff by defendant's breach of duty, it is regrettable that the common-law system and most state statutes are so tightly wedded to a lump-sum judgment in the typical negligence case.

It is the purpose of this article to examine some of the practical problems presented in computing future damages under present law and to suggest some available judicial techniques for improving the approach to assessing future damages.



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