YOU AND THE LAW®

COMPENSATION FOR “DIMINISHED EARNING CAPACITY”

If you’re hurt in an accident, determining the right compensation is never easy. If the matter goes to court, the judge must assess and weigh your testimony and the evidence of doctors and “actuarial” experts (who testify about your potential future lost income) to arrive at a sum of money that best compensates you for your losses. That task can be more difficult if you can still work despite some residual problems. Even if you’ll likely earn as much as you could have if you hadn’t been injured, you may still be entitled to some compensation for your impairment. Why? Because some occupations might be closed to you, and it may be impossible to say that your impairment won’t harm your future income earning ability. Consider the case of John (all names changed here). He was broadsided by another vehicle. His symptoms suggested he suffered a fracture at the base of his skull (often these fractures can’t be seen by an X-ray) in addition to a lot of soreness and bruising, but he didn’t experience any brain damage. Before the accident, John, 31, worked as a Safeway clerk and would have earned a total wage/benefit package of $42,000 a year. But while he tried to go back to work after the accident, he couldn’t handle the heavy work. He found a job instead as a stereo installer making $12,000 a year, with the possibility of earning up to $19,000 a year. The BC Court of Appeal said John had established that he’d lost his capacity to follow the sort of occupation he was doing at the time of the accident. But that didn’t prove that he couldn’t earn as much as before by pursuing some other sort of job. Still, because some jobs would be closed to him in future, he was entitled to something for his diminished earning capacity, which the Court of Appeal said should be $150,000. More recently, the Court of Appeal dealt with the case of Eileen, 22 at the time of her accident. She was a jogger who suffered a head injury when struck by a cab in Vancouver. The trial judge described her permanent head injury as “subtle, something that would not be noticed by a person who met her casually, and yet it restricts or prevents her functioning at the higher level she was once capable of.” While there was still a real possibility she could pursue a master’s degree at university as originally planned, she probably would no longer be able to advance to a senior management level in her chosen field because of the limitations imposed by her brain injury. The trial judge assessed her loss of diminished earning capacity at $500,000, which the Court of Appeal upheld. Determining the proper compensation for diminished earning capacity isn’t a precise science. But having a good lawyer will go a long way to helping you receive a fair amount.

This column provides information only and must not be relied on for legal advice. Please call Stephen W. Turner at 250-868-8801 for your free, no obligation, initial consultation.