Addendum: Calculating After-Tax Income Using Tables on Diskette

by Hugh P. Finnigan

This article first appeared in the summer 2004 issue of the Expert Witness.

The Insurance Amendment Act, 2003 mandates that any loss of income award must be reduced by income tax. The purpose of this addendum is to introduce the reader to Tables on Diskette (TOD), a software program provided free of charge by the Canada Revenue Agency that can be used to calculate an individual’s net income (or after-tax income). That is, one can use TOD to estimate the Canada Pension Plan (CPP); Employment Insurance (EI); and federal, provincial (except Quebec) and territorial tax deductions, based on an individual’s gross earnings. The resulting net income figure can be incorporated into a loss of income estimate that is consistent with the provisions of the amended Insurance Act.

Installing the Software on Microsoft Windows

The latest version of TOD can be obtained from the Canada Revenue Agency’s website: www.cra-arc.gc.ca/tax/business/tod. To install the software,

  • Left-click on the link “Install.exe” located half-way down the web page (under the heading “How to download the “install” file to install TOD.” (Note: If you have a choice, it is better to use Internet Explorer for this purpose than Netscape Navigator.)
  • Select “Open” from the file download dialog box.
  • Once the file has decompressed, choose your language preference and select “OK.”
  • Read the introduction page and click “Next.”
  • Select the destination folder into which you would like to install TOD (or simply click “next” to accept the default).
  • Select where you would like the program to be located and click “Install.” If you are unsure which option to select, “On the Desktop” will place an icon (represented by a Canadian flag) on your desktop that can be “double-clicked” to start TOD.

Using TOD to Calculate Net Income

To illustrate the use of TOD, consider an individual who has an annual gross income of $42,000. Because TOD has been designed to calculate deductions per pay period, it will be necessary to convert this annual income into a salary per pay period. For this purpose, we suggest that you calculate the individual’s monthly gross income, calculate the appropriate deductions, and then convert these figures back into an equivalent annual amount. That is, in this case, choose the “monthly (12 pay periods a year)” option and use a monthly salary of $3,500.

The first time TOD is run you will be asked to select a default language, province, and pay period. For the purposes of this example, select Alberta and Monthly (12 pay periods a year) as the default choices. Once the program is up and running,

  • Left-click on “Regular Salary” located in the upper left corner of the window. You have the option to re-select province and pay-period; however, the defaults chosen when the program was initially run should automatically appear (Alberta, monthly).
  • Left click the rectangular box located adjacent to “Gross salary (or pension income) for the pay period.”
  • Select “Regular salary or paid vacation.”
  • In the white box directly opposite enter $3,500 ($42,000 per year divided by 12).
  • Click “OK” to close the window.
  • Now left-click the “View Deductions” button.
  • The resulting screen provides estimates of the individual’s monthly payroll deductions, including provincial and federal tax, CPP, and EI contributions. The most important of these, for the current example, is “Total tax on salary or pension income,” which provides the monthly federal and provincial taxes, $661.75. If this figure is multiplied by 12, the annual federal and provincial taxes on $42,000 can be obtained – $7,941.00.
  • The figures provided for CPP, $158.81, and EI, $69.30, may also be of importance. But it must be cautioned that the maximum annual contributions for these two programs are $1,831.50 and $772.20, respectively. Although these annual contributions can be reached through monthly payments of $152.63 and $64.35, respectively, Canada Revenue deducts more than these monthly amounts from individuals who earn more than approximately $3,250 per month. Thus, if the individual’s annual salary exceeds approximately $39,000, it will not be appropriate to multiply the monthly deductions reported in TOD by 12. Rather, if the monthly deductions reported by TOD exceed $152.63 and $64.35, respectively, (as they do in the example being considered here), use $1,831.50 and $772.20, respectively, as the annual values of CPP and EI deductions.

In summary, TOD calculates that an individual with an annual income of $42,000 will pay $7,941 in federal and provincial income taxes, $1,831.50 in CPP deductions, and $772.20 in EI deductions, for a net income of $31,455.30.

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From 2003 through 2005, Hugh Finnigan was a consulting economist at Economica, with a Master of Arts degree from the University of Calgary.

Software Review: Personal Injury Damages Partner (Carswell)

by Derek Aldridge

This article was originally published in the summer 1998 issue of the Expert Witness.

The Personal Injury Damages Partner (PIDP) has the potential to be a very useful research tool for anyone specialising in personal injury damages. The software is a CD ROM product ($1,200 for a one-year subscription, with updates 6 times per year – see www.carswell.com) that runs under Windows 95, 3.1, and NT. Carswell describes the content as follows:

The information includes Goldsmith’s Damages for Personal Injury and Death which consists of digests of cases dating back to 1935. As well, the full text of selected cases dating back to 1986 have been included. Personal Injury Damages Partner also contains cross-references and topical indices in the Find infobase.

Certainly the information contained on the CD will be valuable to anyone involved in personal injury cases. However, learning to access this information (i.e., learning the user-interface) could be a daunting task for the less-advanced computer user. The CD does not come with any documentation, not even basic set-up instructions on the disc case – an unfortunate oversight. Advanced users shouldn’t have too much trouble getting started, but Carswell should do some work to bring this program up to the “ease of use” level that is expected these days.

Once I learned the basics of the program, I found it easy to browse through different personal injury topics. For example, one can easily browse through summaries of cases by injury type: hip injuries, paraplegia, brain injuries, speech impairment, and so forth. The case summaries are hyper-linked to the full text judgments which can be read on screen or printed. You can also easily browse through cases which were heard by a specific judge. And there is a general index that you can use to browse the cases. Browsing by topic worked well, but I found the search engine frustrating – I was able to construct queries but the results were not linked to the full-text judgments, summaries, or even the case name. The program simply showed me paragraphs from unknown judgments with my query words highlighted. Some good query examples should have been provided with the software.

The “front-end” interface (called Folio 3.1) which is used to access and search through the information on the disc looks and acts vaguely like a Web browser – there are coloured hyperlinks which you double-click with the mouse to jump to the destination. The Folio program is fairly easy to use, but I think it would be much easier to get up to speed if Carswell could set up their database so we could use our own Web browser to navigate the database. Unfortunately, the program’s help system is specific to the Folio user-interface and does not offer help that is specific to the Personal Injury Damages Partner.

One obvious question is what advantage does this program have over QuickLaw? Two important ones come to mind. First, the program focuses on personal injury cases, so one is not searching or browsing among countless decisions that do not concern personal injury actions. Also, since the product is contained on a CD, searching and browsing is much faster, and the program is more portable, than using the QuickLaw on-line service. Of course the CD media also has its disadvantages over QuickLaw – the information on QuickLaw is always up-to-date, while the information on PIDP is always out-of-date. Hopefully Carswell will eventually allow the user to access the very latest information over the Internet, otherwise, for the personal injury specialist, the PIDP can only be a companion to QuickLaw, not a replacement (assuming that having up-to-date information is essential).

This could be a very useful product if Carswell would improve the ease-of-use and offer a manual and some decent on-line help. As it is, PIDP will be great if you are willing to invest in a lot of training time (or if you are already familiar with the Folio 3.1 interface); but if you have very little patience for software that is not easy to use, then your time will be better spent improving your QuickLaw skills.

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Derek Aldridge is a consultant with Economica and has a Master of Arts degree (in economics) from the University of Victoria.

BOOK REVIEW: The Expert: A Practitioner’s Guide, (Carswell) 1997

Edited by Mr. Justice K. Matthews, J. E. Pink, A. D. Tupper, and A. E. Wells

Reviewed by Christopher Bruce

This article was originally published in the spring 1998 issue of the Expert Witness.

The Expert is a collection of 27 essays concerning expert testimony, each essay having been written by one or more experts in the relevant discipline. The purpose of the book, according to the foreword, is to provide trial lawyers with a basic understanding of both “… the role of the expert in the legal process … [and] … the fundamental concepts of the discipline within which the expert operates.”

Measured against this goal, the book must be considered to be a success. Although the chapters are of extremely variable quality, anyone wishing to obtain an introduction to the role, and basic methods of analysis, of disciplines as widely diverse as forensic psychology, accounting, engineering, toxicology, and photography will find this book of value. I was fascinated, for example, by the scientific description of how a fire spreads (Chapter 24, “Forensic Fire Investigation”) and by the differences between the expert’s “model” of memory and that of the layman (Chapter 11, “Eyewitness Evidence Identification and Testimony”).

Nevertheless, the book suffers from two major weaknesses. First, from the point of view of civil litigation lawyers, the book focuses too narrowly on the experts who appear in criminal trials. Although one can imagine uses in civil trials for drug experts, pathologists, DNA experts, fire investigators, and handwriting analysts, their fields of specialty are not the everyday stuff of litigation. Furthermore, while concentrating on experts such as these, the book excludes many of the experts commonly found in civil litigation, particularly vocational psychologists, economists, therapists, and cost of care experts.

Second, in my view, the editors misunderstand what it is that lawyers would find useful in such a book. It is clear that each author has been asked to provide a 10 to 15 page summary of the role which an expert in his or her discipline can play in court, along with a brief outline of the basis of the scientific approach which characterises that discipline.

But consider: how often is it that a lawyer will not know what type of expertise is required for a particular circumstance? If photographic evidence is in dispute, it is not necessary to read a book on experts to know that it might be useful to hire a photographic expert. And if a claim has been made that an individual was abused as a child, most legal practitioners are knowledgeable enough to realise that they should seek out a psychologist with some expertise in “recovered memory.” Even if the field of expertise was sufficiently arcane that most lawyers would be unfamiliar with it, (forensic odontology is covered in Chapter 7), a single chapter listing the various disciplines and providing a one or two page summary of their areas of expertise would have been sufficient.

Furthermore, when an expert has been hired, one of the functions of that individual will be to educate the lawyer concerning the methodologies used by the expert’s discipline. It is not necessary to provide detailed descriptions of these methodologies in a book such as this.

Rather, it is my view that the primary function of a book on experts should be to provide two types of information:

  • a discussion of the law concerning expert witnesses; and
  • a critical analysis of the weaknesses of the methodologies employed by the various disciplines – in order to help you to avoid flaws in your own case and to find flaws in your opponent’s case.

With respect to the former goal, the first two chapters in this book – Mr. Justice Sopinka’s “The Use of Experts” and Richard Scott’s “Judges Instructions Re: Experts” – provide useful introductions. Justice Sopinka’s discussion of hearsay evidence will be particularly valuable to most litigators.

With respect to the identification of weaknesses in expert testimony, the book was disappointing. Only two chapters were of real value. The first of these was Earl Cherniak’s chapter on “Examination of the Expert Witness” which contains a number of useful tips from one of Canada’s foremost litigators.

I also found Dr. Reginald Yabsley’s chapter, “The Medical Expert,” to be refreshing. All of the other experts in this book merely described the fundamental methodologies employed by their disciplines and provided examples of testimony. At virtually no point did they turn a critical eye on their areas of expertise. Most of these chapters were little more than advertisements for their various disciplines. Dr. Yabsley, on the other hand, added two important elements to his chapter. He identified a number of weaknesses that are often found in medical testimony and he provided detailed analyses of two expert medical reports. Hence, unlike the other chapters in this book, his chapter provides a considerable amount of assistance to the cross-examiner.

In short, I would recommend this book only to those law firms with large practices in both civil litigation and criminal law. Until the editors restructure the book to provide a more balanced, critical review of each discipline, it is only the first four chapters which most litigators will find of value.

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Christopher Bruce is the President of Economica and a Professor of Economics at the University of Calgary. He is also the author of Assessment of Personal Injury Damages (Butterworths, 2004).

BOOK REVIEW: John Barnes, Sports and the Law in Canada, 3rd Edition (Butterworths: Toronto) 1996

Reviewed by Christopher Bruce

This article was originally published in the spring 1997 issue of the Expert Witness.

John Barnes, B.A., B.C.L. (Oxon.) barrister, is co-director of the Sports Law Project at the University of Western Ontario. He has drawn on 20 years of experience studying sports law on three continents to write an intensively-researched yet eminently readable account of the state of sports law in Canada.

The first nine chapters of the book deal primarily with issues of contract and labour law in major league sports. For the sports junkies among us, this makes fascinating bedtime reading. But it offers little to those whose primary vocational interest is personal injury litigation.

Where the book should justify its purchase price to civil litigators is in Chapter 10, “Sports Injuries: Criminal and Civil Liability.” The 50-page section on civil liability contains over 350 footnotes – many of which list numerous references to books, articles, and cases. Analyses are provided of: intentional torts; assumption of risk; liability of participants (player sues player and spectator sues player); liability of facility operators (occupier’s liability to both participants and spectators; and owner’s liability in negligence); liability of schools, coaches, officials, and parents; liability of such organisations as amateur associations and professional teams; and medical negligence.

In each case the coverage is thorough and informative. Particularly commendable, in my view, is the index which not only provides the usual headings, such as “contracts” and “negligence,” but also allows the reader to search by sport – golf, hockey, rugby, football, gymnastics, etc. – and by type of injury.

My only complaint is that there is no discussion of the issues involved in the calculation of damages in sporting cases. This is only a minor complaint because there is, in my experience, only a small number of situations in which sports injuries raise unique concerns. Nevertheless, some recognition of these situations would have been useful.

One such case occurs when the plaintiff is a minor who claims that the injury has prevented him/her from becoming a professional athlete. As those with only a passing interest in sports will know, it is rare for even the number one draft pick to have a successful career in the NHL. How then to deal with the sixteen year-old who is third in scoring on a low-ranked junior A or university hockey team? Or the twenty year-old who is ranked twentieth among NCAA golfers? This is an issue which the courts have not faced clearly.

This minor quibble aside, I recommend Barnes’ book highly to anyone who is called upon to litigate a sports-related personal injury action.

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Christopher Bruce is the President of Economica and a Professor of Economics at the University of Calgary. He is also the author of Assessment of Personal Injury Damages (Butterworths, 2004).