Its Tricky Figuring Out Future Income Loss From Accident

A car accident can cause different kinds of losses; one loss may be your reduced future earnings capacity. The court must try to assess this to fairly compensate you. A recent B.C. Supreme Court case had to grapple with such an assessment.

Keith, 19 and in excellent physical condition, was riding his bicycle through an intersection when he was hit by Carla’s left-turning car (names changed). Carla was fully at fault for the accident.

The trial took place three-and-a-half years after the accident. By then, Keith had fully recovered from many of his injuries. But some injuries and his shoulder, hip and neck pain when he performed certain tasks were chronic and unlikely to ever improve much. They would prevent him altogether from doing certain kinds of work in future, like the heavy physical labour of his last job. And they left Keith with limitations even when it came to office work.

This meant he would no longer be able to do the shipyard work he used to, which involved lifting heavy loads plus some more skilled work. As well, he’d likely not be able in any future job or career to work the same long hours as he could before the accident, despite his good work ethic and diligent efforts at rehabilitation afterwards. He also couldn’t type or take notes like before. This impacted his university studies and would affect any office work he’d be doing going forward. He would also probably always have difficulty with office activities where he’d have to maintain a fixed posture for an extended period.

The defendant argued there was no loss of earning ability (that Keith could earn more at office work), or at most it was worth some $54,000. Keith claimed his future income loss came to about $298,000.

The court emphasized the assessment is a matter of judgment, not simply a mathematical exercise. It requires estimating future probabilities, possibilities, contingencies and risks, when comparing Keith’s working future now with what it would have been if the accident hadn’t happened. Once Keith had proved there was a real and substantial possibility his future income earning ability had been reduced, which he did, the court then has to quantify the loss taking these future eventualities into account. Here, the B.C. Supreme Court outlined various approaches courts use to quantify the financial harm of the injured person’s reduced earning ability, depending on each unique situation. They all have the common aim of putting the accident victim in the same financial position as if the accident had not occurred.

In this case, the court concluded that Keith’s future annual earnings over his working life would be about $10,000 per year or 13% less than before. This amounted to roughly $300,000 in terms of present day money. After subtracting $75,000 (as Keith had started university earlier than he would have otherwise), the court awarded him $225,000 for his reduced future earnings capacity.

If you’re injured in a car crash, consult an experienced personal injury lawyer to help you receive the compensation you’re entitled to.

Written by Janice and George Mucalov, LL.B.s with contribution by COBBETT & COTTON. This column provides information only and must not be relied on for legal advice. Please contact COBBETT & COTTON for legal advice concerning your particular case. Names of the parties in reported cases have been changed or removed to protect their identity. Lawyer Janice Mucalov is an award-winning legal writer. “You and the Law” is a registered trade-mark. ©Janice and George Mucalov.

Comments are closed.
Translate »