Loss of Earnings/Diminished Earning Capacity

Loss of Earnings/Diminished Earning Capacity

Generally, accident victims are entitled to receive reimbursement for their loss of earnings in a personal injury case. However, they may also be entitled to compensation for diminished earning capacity if a permanent impairment adversely affects their future earning potential. 

Working with a personal injury attorney can help you receive the compensation for lost wages that you deserve. Lost wages are commonly awarded as economic damages in personal injury cases, including motor vehicle accidents, medical malpractice claims, workplace accidents, slip and fall accidents, and product liability claims.

Filing a Claim for Loss of Earnings After a Personal Injury or Accident

If an accident or injury affects your ability to work, you can recover lost wages from the party who caused your injury. 

You may recover damages for loss of income due to:

  • Being unable to work due to an accident injury
  • Time missed from work to attend doctor’s appointments or receive medical treatment or therapies
  • Loss of benefits, including accrued vacation time and sick time
  • Lost overtime earnings, commissions, bonuses, and other forms of income

You need to document your lost income by keeping track of all days missed from work. Your doctor may need to provide a statement explaining why your injuries prevented you from working. The doctor may need a copy of your job duties so they can refer to specific duties you cannot perform due to your accident injuries.

It can be helpful to gather copies of your tax returns, pay stubs, and other evidence of past earnings. They can help prove the amount you would have earned had you been able to work during a period of time.

Proving Damages Related to Diminished Earning Capacity

Proving lost earning capacity is more complicated than calculating the amount of lost wages. First, you must prove that you sustained a disability or impairment that restricts your ability to work. You may need to provide expert testimony from medical doctors explaining the extent of your injuries and how those permanent impairments affect your capability to perform your job duties.

The value of your claim is the difference between:

  • What you would have earned had you not been injured; and
  • The amount of money you can earn now given your impairments. 

An experienced personal injury lawyer will work with several expert witnesses to prove loss of earning capacity. They’ll gather information to assist economists and financial experts in calculating the value of future loss of earning potential.

Information experts use to calculate future losses for reductions in earning capacity include:

  • Your prior work history and earnings history
  • The training, experience, education, and skills you possessed at the time of injury
  • Your current age and anticipated retirement age
  • Your overall health before and after the accident
  • Your chosen career and the type of work you perform
  • Other jobs you can perform and the average pay for those jobs
  • The estimated rate of inflation 
  •  The severity of your impairment or disability

Economists and financial experts use the evidence to calculate how much you would have earned had you not been injured. Then, they compare that amount to the anticipated amount you can earn now, given your restrictions and limitations. 

It is difficult to prove reduced earning potential without hiring expert witnesses. In addition, insurance companies may hire their own expert witnesses to refute your claim or calculations of damages. 

A personal injury attorney will work with expert witnesses to obtain evidence and expert opinions. Then, they’ll use the evidence to prove that your accident injuries adversely affected the amount of future earnings you would have received had it not been for the accident. 

You Must Prove Fault Before You Can Recover Loss of Income Damages

Proving how much money you could have earned had you not been injured does no good without evidence of fault and liability. If a person is not liable for your damages, you do not receive any compensation for a personal injury claim. Therefore, in most personal injury cases, you must prove the legal elements of a negligence claim. 

The elements of negligence are:

  • Duty of Care – The person owed you a duty of care out of a legal or moral obligation;
  • Breach of duty – The person breached the duty of care by failing to meet the reasonable person standard; 
  • Causation – The person’s conduct was a direct and proximate cause of your injuries; and
  • Damages – The breach of duty caused you to sustain damages.

Your damages include your loss of earnings and diminished earning capacity. It also includes other economic damages, such as medical bills. You could also be entitled to recover compensation for your non-economic damages (“pain and suffering”).

Contact a Gainesville Personal Injury Lawyer for a Free Consultation 

Long-term impairments significantly impact your earning potential. Therefore, you deserve compensation for your loss of earnings and diminished earning capacity. Contact an experienced Gainesville personal injury attorney to discuss your case during a free case evaluation.