Growth rate becomes critical to lost profits calculation

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Abstract: In commercial cases involving lost profits, selecting an appropriate growth rate is a critical step in calculating damages. It’s also one of the most challenging. Depending on the amount at stake and the length of the damages period, adjusting the growth rate by just a few percentage points can have a significant effect on the outcome. This article looks at one lost profits case in which the court found that the plaintiff’s expert’s general approach was sound but that his method of selecting the growth rate wasn’t. A sidebar discusses one of the court’s criticisms in particular. Citation: Manpower Inc. v. Insurance Company of the State of Pennsylvania, No. 08C0085 (E.D.Wis. 09/20/2010)