Opinion ID: 2615565
Heading Depth: 3
Heading Rank: 2

Heading: Did the Evidence Support the Workers' Compensation Board's Findings on the Amount of Future Compensation Liability?

Text: The employer contests the Board's determination of the amount of future medical expenses. The employer argues that the future benefits were not properly reduced to present value because Stone's expert witness first calculated future medical and associated transportation expenses by assuming that they would be affected by inflation before using the interest rate described in the Board's regulations. Regulation 8 AAC 45.162 defines the interest rate to be used [i]n computing the present value of all future compensation and benefits under AS 23.30.015(e) as two percent less than that set in AS 45.45.010, or eight and a half percent. Stone's expert, Gallela, used this interest rate, but only after calculating future costs by taking into account projected inflation. We find no error in this methodology. In Wainwright v. Wainwright we observed that a party should not be denied ... the benefit of inflation's impact on future earnings while saddling her with the detriment of inflation's effect on the discount rate. [25] Similarly, AS 09.17.040(b)(2)applicable to common law tort claimsrecognizes that future anticipated inflation should be taken into account before applying a market discount rate. Gallela's method did no more than recognize the point made by these authorities: since the discount rate is affected by anticipated future inflation, future inflation also must be considered when calculating future expenses. [26]