Understanding Loss of Earning Capacity Damages

January 22, 2020

If you’ve been harmed in an accident that was caused by the negligence, recklessness, or intentional misconduct of another party, then the law may entitle you to compensation for your losses, which may include damages that cover the loss of future earning capacity.  Loss of future earning capacity damages describe the “difference” in lifetime earnings potential between your pre-accident self and your post-accident self.  Depending on your age, these damages can be significant — in some cases, it may form the largest portion of your total damages claim. Contact our Doylestown personal injury attorney today to discuss your case.

Wage Loss, Earning Capacity, and Projecting Damages

Wage loss damages are related to, but not the same as damages for the loss of future earning capacity.  Whereas wage loss measures the actual wages that are unearned due to one’s inability to work (i.e., days taken off due to injury), loss of earning capacity damages measure the difference in one’s wages over the long-term.  In some cases, if the plaintiff is so thoroughly impaired that they are unable to work at all, the loss of earning capacity will be equivalent to one’s lost wages until retirement.

Loss of earning capacity damages require a projection of future earnings along two different timelines — one in which you were never injured, and the current timeline.  By doing so, you can (to a degree) accurately compare the two earning potentials.  You will have to project what a lifetime of salary raises, promotions, and bonuses would yield in each timeline and career path.  There is a tendency to overestimate one’s projected earnings in the “no injury” timeline and to underestimate one’s projected earnings in the “current” timeline, so care must be taken to ensure that the projections are reasonable and not excessive.

Using Expert Testimony to Strengthen the Claim

Loss of future earning capacity damages are fundamentally uncertain, and as such, it is unlikely that you will recover the compensation you seek unless you work with experts who can provide supportive testimony that strengthens your claims.

Suppose, for example, that you suffer serious back injuries in a car accident.  Before the accident, you had a desk job as an IT worker.  The back injuries are so severe, however, that you cannot sit or stand at a desk for more than an hour or two at a time.

Now, making a claim for wage loss seems fairly straightforward given that you cannot perform the primary duties required of your job, but making a loss of earning capacity claim is quite a bit more complicated.  You will have to be able to show that the back injuries prevent you from doing alternative work of equivalent earning capacity, such that your long-term earnings potential is negatively impacted.

With the aid of a vocational expert, there will be testimony that supports your argument.  The vocational expert will be able to testify as to what careers are open to you given your existing education and training, and what the earning potential of those careers will be.  In conjunction with a healthcare expert (who will testify as to the extent of your impairment), you can paint a picture that fully describes your condition and the limitations thereof.

Let a Doylestown Personal Injury Attorney Help You Today

When pursuing litigation, plaintiffs should seek to maximize the available damages so that they can adequately cover their losses.  As such, it’s important to consult a skilled Doylestown personal injury attorney who understands how to effectively secure the maximum possible compensation.