Prejudgment Interest and the Fallacy of the Invalid Round Trip

October 18, 2016

CRA consultants Aaron Dolgoff and Tiago Duarte-Silva published an article in World Arbitration and Mediation Review, titled “Prejudgment Interest and the Fallacy of the Invalid Round Trip.” In this article, the authors analyze the “invalid round trip” rationale for using the claimant’s opportunity cost of capital to determine prejudgment interest on damages awards. They argue that the rationale makes inappropriate comparisons between uncertainty or risky expected future profits and cash-equivalent or risk-free present values.
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