MBE Rules · Remedies
Present Value and Periodic Payments
Present value / periodic payments
The rule
Future economic damages are reduced to present value; in actions against health-care providers and on request over $50,000, courts may order periodic payments rather than lump sums.
In plain English
When a plaintiff is awarded future economic damages, those damages must be calculated in present value terms to reflect their worth today. In cases against healthcare providers where damages exceed $50,000, courts can choose to pay these damages in periodic installments instead of a single lump sum.
Worked example
A patient is awarded $100,000 for future medical expenses after a malpractice suit against a healthcare provider. Since the amount exceeds $50,000, the court decides to award the damages in annual payments over five years instead of a one-time payment. This allows the plaintiff to receive $20,000 each year, adjusted to present value.
Memory hook
Future damages today: present value pays off!
The trap
Students often forget that only damages over $50,000 qualify for periodic payments, leading to incorrect conclusions about the payment structure. They may also confuse present value calculations with simple future value assessments.
How examiners test it
Questions typically present a scenario involving future economic damages and ask whether periodic payments are appropriate, testing the candidate's understanding of the threshold amount and present value calculations.
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