After a wrongful act or accident caused by a negligent party, your priority is always to seek medical treatment and recover compensation for medical costs and lost income. Sadly, your physical health is not the only worry you will face in your recovery journey. You can suffer losses that do not meet the eye. These losses are even more devastating than physical pain and have long-lasting effects. One of these losses is the inability to work, also called a loss of earning ability or capacity.
Did you know you can pursue these damages as well?
If your injuries prevent you from generating work-related income, you will have problems footing your medical expenses and offering financial support to your family and dependents. California injury laws allow plaintiffs to seek compensation for losing the potential to earn a living. What is discussed below is how to recover these damages.
Legal Definition of Loss of Earning Capacity
Accidents or wrongful acts can cause serious injuries, some of which permanently deprive you of the ability to work or hinder you from working past the court date and the order to compensate you for your damages. Luckily, as a plaintiff in an injury case, you can recover damages for lost earning capability. These are economic or special damages intended to reimburse you for the reduction or loss of capacity to generate income in the future.
Instead of dealing with medical expenses and property damage, the economic damages for lost potential to earn focus on work-related financial losses inevitably stemming from the accident. It is an amount that represents reasonable reimbursement for a lost chance or capacity to work in a particular field.
Calculating lost earning ability is difficult. Therefore, if the injuries sustained due to someone else’s negligence are catastrophic and you are worried about proving these damages, you should talk to an experienced injury attorney.
Lost Income vs. Lost Earning Capability
In a California injury claim, the law allows you, the plaintiff, to recover damages for:
- Actual income and employment benefits you missed out on between the injury date and lawsuit or settlement and
- The lost earnings you reasonably believe you will suffer in the long run due to the personal injuries.
Lost salary or wages and earning ability sound almost identical, but they are two distinct damages. Injury statutes in the state allow plaintiffs to pursue past and future lost income. Whereas lost income or wages refer to earnings lost before the start of the lawsuit or the date the court issues a settlement, lost earning capability refers to your loss of ability to make money in the future. It refers to the figure you could have reasonably earned without the injuries.
Unlike lost capability to earn, lost wages are easy to prove with specific evidence because they are tangible and involve the figures you have lost because of being absent from work. You only need to demonstrate to the court the amount you were earning and your expected income if not for the injuries. You can produce medical and job records showing the days you missed work because of injuries. Also, a judge can compare your attendance records and pay stubs to determine your wage loss.
For example, if you break your leg while delivering products on your truck and have missed work for a month, you can include lost income when claiming damages from the liable party. The damages compensate you for the past few days you have been unable to work because of your injuries.
Proving lost capacity to earn is challenging because the loss has yet to occur, making it difficult to quantify as the figures are speculative. If, from the above example, you learn that your leg injuries will take twelve months to recover and resume work thoroughly, your lost earning ability will include all the income you could have generated for the twelve months you will be out of work.
You should hire an experienced injury attorney to build a strong case and demonstrate with a preponderance of evidence that the damages exist in your claim. The plaintiff in injury claims holds the burden of proof and must ascertain that the defendant was negligent and that the defendant’s actions or inactions caused the injuries and subsequent losses. Therefore, for the court to grant you lost potential to work damages, you must show the defendant's negligence caused you to lose your earning potential.
Injuries Eligible for Loss of Earning Ability Damages
Must your injury be permanent to qualify for lost or reduced earning ability damages? Not necessarily. These damages are awarded when your harm has not completely healed when the court issues settlement orders or during the trial. The injuries do not need to be permanent.
They are ordinarily available when you sustain severe or permanent injuries that take a long time to heal. Also, it could stem from a settlement for the claim being reached early enough because of the uncertainty surrounding it.
Contact your injury attorney to discuss your temporary injuries and see if they qualify for loss of earning capacity damages.
Lost Earning Potential Statute of Limitations
Most injury claims in California provide twenty-four months within which you should file a claim, although specific actions have shorter or extended timelines. For example, you should file a medical malpractice lawsuit before a civil court within twelve months of the incident.
The clock starts ticking, or the timeline accrues when you learn you have personal injuries or ought to have realized you are injured.
When you fail to file a claim within the stipulated timeline, you lose your constitutional right to file a lawsuit. Nevertheless, when the injuries are severe and prevent you from returning to work within the limitations period or the period within which you should bring a civil suit, you can file a claim even after the lapse of the timeline.
In short, California has no predetermined duration within which you must be injured to seek compensation for lost earning potential.
In other instances, you can resume work after injuries only to realize you missed out on career opportunities or promotions. Lost earnings potential statutes enable you to seek reimbursement for these lost opportunities and income if you demonstrate that you incurred the losses.
Ensure you have an injury attorney's guidance when you bring a claim to increase the chances of a favorable verdict.
Incomes You Must Include in Your Lost Earning Potential Claim
Loss of or diminished earning potential or capacity refers to the difference between what you could have made were it not for the injuries and your income, given the harm suffered. The forms of income included in these damages are:
- Raises.
- Bonuses.
- Overtime pay.
- Self-employment earnings.
- Salary.
- Commission.
- Free meals.
- Vehicle allowances.
- Vacation, personal or sick day.
- Profit-sharing contributions.
Calculating Lost Earning Potential
The speculative nature of these damages makes them difficult to prove. It would help if you worked closely with an injury attorney and economists to calculate the value of the damages you will be claiming. You will need experts to estimate your damages using your work-life expectancy, expected income, and other information. The factors your legal team and experts will consider when valuing your claim are:
- Your profession and career.
- Your work-life expectancy.
- Current wages.
- Your skills, talent, and abilities.
- The duration of the injuries or incapacity.
- Your age.
- The time you are expected to return to work if your injuries are temporary.
- Your well-being before the personal injuries.
- Whether your earnings were fixed or were based on work performance.
- Your past performance reviews.
- The terms of your employment contract.
- Your life expectancy before the injuries.
- Your employer’s policies on promotion, cost-of-living, raises, and other employment benefits.
- Chances of promotion.
- Your long-term job goals.
Lost Earning Potential for Self-employed Plaintiffs
If you are self-employed, demonstrating you have lost your earning potential can be challenging based on your case’s circumstances. However, the court will consider your age and business revenue. You must provide the business’s financial records to prove you have a steady income. That way, the court can calculate your lost earning potential. However, proving lost earning abilities will be complex if your business is new and the income was inconsistent before the injuries. You will need an injury attorney to build a compelling argument.
Lost Earning Potential for an Unemployed or Inexperienced Person
You do not need a work or income history to claim lost potential to earn after a personal injury. These cases are common for children and students below 20 years old. If you partner with an injury attorney, they will survey the market to determine your job opportunities. They will compare this information to your education and career aspirations before the injury. That way, they can come up with a figure they can demand as compensation from the liable party for the lost earning capabilities.
For example, David is 18 years old and an amateur boxer who has won many awards, like The Golden Gloves and is aiming to turn pro. Unfortunately, the fighter was involved in a car accident that left him with serious knee injuries. David testified that he intended to become a professional and represent the country at significant events before the accident.
David’s doctor explains that the knee requires fusion and that he might not box again because that would stress the knee. Even if David had not become a professional boxer, he had a bright future as he had won a few championships. David’s attorney can talk to the coaches to analyze the results of other amateur boxers who turned pro to demonstrate to the court that David lost his earning potential. The previous awards can be used to estimate the lost earning potential.
Demonstrating Lost Earning Potential
The court can award lost earning ability if you, with the help of an injury attorney, demonstrate with a preponderance of evidence that you suffered the damages.
If you have worked for the same company for decades, demonstrating lost earning potential is easy. You will only present records of your past income coupled with guaranteed or expected pay rises depending on the cost of living, contract terms, or seniority. Letters from your employer and pay stubs can also be presented as evidence.
For instance, John is a fifty-year-old construction worker. He has been working for the same construction company for the past decade. One day, while returning home from work, John is involved in an auto accident with a drunk driver and suffers traumatic brain injuries (TBIs). The permanent injuries prevent John from ever working again.
Before the auto collision, John was healthy and had no known health complications. The average life expectancy for a white man in Los Angeles County is 75 years. John, therefore, is expected to work for the duration of his work-life expectancy.
John’s wages before the accident were $30 per hour. Besides, he was entitled to overtime pay and bonuses. His wage stubs and tax returns in the last four years before the injuries showed that John had an average annual income of $60,000.
If John were expected to retire at 67, his total earning potential would be $60,000 × 17 = $1,020,000, plus pay raises and bonuses.
Nevertheless, calculating lost earning potential is not always straightforward, making the claims difficult to prove. Elements that will complicate the valuation of these damages are:
- Your age.
- Whether you have a career or study field with high earning potential,
- Whether your earnings depend on work performance or discretionary bonuses.
- Whether you are self-employed and have an inconsistent income.
- Whether your injuries are catastrophic but temporary or entirely disabling.
For example, Carol has been a lawyer for a big law firm in Los Angeles for three years. Her average annual income is $150,000, plus unrestricted bonuses. Unfortunately, Carol is involved in a bicycle accident caused by a driver’s negligence and sustains spinal cord injuries. When the accident occurred, Carol was scheduled for an interview with another law firm in the city that was offering her a partnership role.
Due to the injuries, Carol spent two years in the hospital and in rehab when she did not go to work. Even if she can return to work, she has diminished earning potential because she only works two hours a day, after which she should rest. Also, the hours cannot allow her to become a partner in the company. Furthermore, she lives with her family, who care for her needs because she cannot perform most routines independently.
Carol’s claim for losing the ability to earn is very complex because she could have attended the interview and failed or made a partner. Again, she could have turned down the interview request. Her injury attorney must work tirelessly to demonstrate she could have taken the interview and made partner.
The proofs your injury attorney must present to win maximum reimbursement for these damages include paperwork and testimony from the following parties:
Your Boss or Employer
Your boss can furnish your injury attorney with details about your past income, your performance review, and the employer’s record of promoting individuals with your abilities, talent, and skills.
Colleagues, Family, and Friends
Your co-workers, family, and friends can better testify to your life before sustaining injuries and the changes brought about by your injuries. They can give a vivid explanation of your interests, life goals, and activities, which are crucial in building a solid claim.
Your Therapist or Doctor
Your physician and therapist can clearly depict your health before the mishap, your long-run prognosis, and the accident's impact on your work capabilities. Your doctor’s testimony in court is a critical part of the case.
A Vocational Rehabilitation Professional
You do not always need an expert witness in an injury claim to obtain compensation. However, when necessary, the testimony of a vocational rehabilitation expert regarding the treatment you need and how long it will take before you can return to work, if possible, can help compel the judge to award maximum damages for losing the capacity to make a living.
A Knowledgeable Economist
An experienced injury attorney will bring in the testimony of an economist showing salary trends in your industry. When you have a professional license, certification, degree, or higher education, the economist will compare the salaries of individuals with the same qualifications as yours to give a professional opinion of what you should be earning.
A profound attorney understands the evidence they need to build a compelling lawsuit. Also, they partner with other experts, like expert economists and vocational rehabilitation professionals, to find the best way to recover the damages you are entitled to for losing the capability to earn.
Find a Skilled Los Angeles Personal Injury Attorney Near Me
When you suffer personal injuries because of another party’s negligence, you can bring an injury lawsuit against the party to claim reimbursement for your losses. The LA Personal Injury Law Firm is known to represent clients in Los Angeles to obtain lost earning capacity damages. Our attorneys will work hard to ensure you receive maximum reimbursement, regardless of the circumstances. Contact us today at 310-935-0089 for a no-obligation consultation.
