Present Cash Value Arizona: Discounting Future Injury Damages

Present cash value Arizona juries must apply whenever a case includes future economic damages. It trips up a lot of people the first time they hear it explained. Here’s the idea: a dollar awarded today for medical care you’ll need in ten years isn’t worth the same as a dollar spent ten years from now, because invested money grows. So future economic losses get discounted down to what that same outcome is worth in today’s dollars.

Why future damages get reduced this way

Arizona statute addresses this directly. A.R.S. § 12-589 requires courts to compute the present value of future payments whenever future damages are ordered paid in advance. The logic is simple. Say a jury awards $500,000 for medical care spread over the next twenty years, paid all at once today. That money can grow well beyond $500,000 by the time all the care is actually needed. Paying the full future total today, without any discount, would overpay the injured person relative to what the future costs actually require.

What gets discounted, and what doesn’t

This calculation applies to future economic damages: future medical expenses, future lost earnings, and similar quantifiable future costs. Courts don’t reduce non-economic damages, like pain and suffering or hedonic damages for the years ahead, to present value. There’s no market rate of return to apply, since these aren’t calculable future expenses in the first place.

An expert economist usually supplies the discount rate. That expert weighs projected inflation against a reasonable, conservative rate of investment return, then arrives at a defensible present-day figure. Often it’s the same economist who calculated the future damages to begin with.

How this plays out at trial

In practice, present cash value Arizona disputes tend to center on one question: which discount rate is reasonable? A higher assumed rate of return produces a lower present-value award. A lower assumed rate produces a higher one. The gap between a plaintiff’s expert and a defense expert on this single number can swing a verdict by tens of thousands of dollars. That makes it one of the more contested pieces of expert testimony in a serious injury trial.

The bottom line

Present cash value isn’t a technicality that shrinks your recovery for no reason. It’s how Arizona law makes sure a future damages award actually matches the future cost it’s meant to cover, no more and no less. Understanding it explains why your attorney’s economist often presents a number that looks different from a simple sum of projected future bills.

Keep reading

• Future Medical Expenses Claims
• Structured Settlements Explained

This article is for general informational purposes only and doesn’t constitute legal advice. Present value calculations in any specific case depend on expert testimony and individual facts.