Legal Definitions - total-offset rule

The total-offset rule is a theory of damages in tort law. It states that the effect of inflation reduces the value of money over time, which offsets the accrual of interest on an award. Therefore, it is unnecessary to discount future damages to their present value.

Suppose a person is injured in a car accident and is awarded $100,000 in damages. The total-offset rule suggests that the value of this award will decrease over time due to inflation. However, the interest earned on the award will increase its value. The total-offset rule states that these two effects will cancel each other out, making it unnecessary to adjust the award for inflation or discount future damages to their present value.

Another example could be a medical malpractice case where a patient is awarded $500,000 in damages for future medical expenses. The total-offset rule suggests that the value of this award will decrease over time due to inflation. However, the interest earned on the award will increase its value. The total-offset rule states that these two effects will cancel each other out, making it unnecessary to adjust the award for inflation or discount future damages to their present value.

In summary, the total-offset rule is a theory of damages that takes into account the effects of inflation and interest on an award. It suggests that these two effects will cancel each other out, making it unnecessary to adjust the award for inflation or discount future damages to their present value.