Personal injury can cause major upheaval, both for the injured individual and for their family and friends. If a serious injury results, long-term treatment could be required. In that case, a claim for compensation may be able to help cover for lost wages.
This article looks at the tricky issue of how to assess damages for loss of future earning capacity. We also look at a recent decision of the Court of Appeal for British Columbia, in which the key issue was how to assess such damages for a young plaintiff injured in a motor vehicle accident, in circumstances where there was “uncertainty as to his vocational future”.
Damages for loss of future earning capacity
Injured plaintiffs can claim a range of different types of damages in court proceedings, such as compensation for pain, suffering and loss of enjoyment, lost income up until the point of trial and the cost of future care.
Courts may also award an amount for loss of future earning capacity, if the accident has reduced their earning ability. This involves comparing the likely future of the plaintiff if the accident had not happened and their likely future after the accident has happened.
The plaintiff needs to show that there is a potential future event that could lead to a loss of capacity, such as a chronic injury. They need to prove a real and substantial possibility that the future event will cause a pecuniary loss. If this exists, the final step is to assess the value of the possible future loss, which includes assessing the likelihood of the possibility occurring.
Assessing damages when the plaintiff has an uncertain career path
Assessing damages for loss of future earning capacity involves using either:
- An earnings approach – taking the difference between the pre and post accident earnings, where these are certain enough; or
- A capital asset approach – looking at what the plaintiff has lost as a capital asset.
Neither of these approaches involve precise calculations, but the judge needs to make the best estimate they can, based on the evidence. If the plaintiff has an uncertain career path, it is even more difficult to come up with a figure. However, the judge will look at the evidence and try to project a range for the plaintiff’s without accident earnings.
Plaintiff was severely injured in a motor vehicle accident
In Dunn v Heise, the 24 year old plaintiff was severely injured when a semi-truck rear-ended his vehicle on Highway 1, near Rogers Pass. The plaintiff suffered lacerations, fractures and soft-tissue injuries, as well as various psychological injuries.
Although the truck driver admitted liability, the assessment of damages proceeded to trial. Pre-accident, the plaintiff worked more than full-time hours installing audio-visual equipment and earned $2,400 per month.
Looking forward, he planned to continue installing audio-visual equipment and working towards earning a stake in his boss’ business. He had considered additional training in network security but said the idea had “drained away”. He had also considered additional training in architecture, but had not seriously pursued the idea.
Trial judge awarded $485,000 for loss of future earning capacity
On the issue of loss of future earning capacity, the trial judge found that the plaintiff had chronic pain and psychological problems that would affect him for the rest of his life. Her Honour concluded that the plaintiff was vulnerable to being involuntarily out of the workforce and unable to pursue work that may cause stress.
The trial judge also found that there was a real and substantial possibility that he would have successfully continued to pursue a career in audio-visual installation, had the accident not occurred. Her Honour employed the capital asset approach, deciding that the accident reduced his earning capacity by 25 to 35%.
Finally, the trial judge estimated the low and high end of the present value of the plaintiff’s future lifetime earnings had there been no accident. For the low end, her Honour used his average annual pre-accident income and for the high end, applied an annual increase of $5,000 to reach a maximum amount of $149,000 by age 50. Her Honour then converted these to present values, took 30% of the average of the low and high end, reduced this amount by 25% to take account of various negative and positive contingencies she identified, and reached a final award of $485,000.
Court of Appeal reduces award, deciding the high end of the without accident earnings range was not supported by the evidence
Justice of Appeal Marchand held that the high end of the plaintiff’s pre-accident earnings range was too high. The expert evidence for the earnings of an electronics installer in 2020 was less than $80,000 per year. There was no evidence that the plaintiff could earn almost double the top of the range for electronics installers. There was also no evidence that he would work exclusively in other occupations, such as network security.
The appeal was therefore allowed. His Honour decided instead to award on a high end of $79,000. This resulted in an award of $370,000 for loss of future earning capacity.
Contact Meridian Law Group in Vancouver for Representation in Personal Injury Claims
At Meridian Law Group, we understand the upheaval caused by a serious personal injury. We work tirelessly to secure maximum compensation for our client’s injuries. Our deep knowledge and experience ensure that we are able to navigate the medical and legal complexity of each client’s case.
The talented and determined personal injury lawyers at Meridian Law Group in Vancouver provide skilled representation and pragmatic advice for clients involved in accidents. They help clients negotiate settlements to minimize cost and stress, or prepare and mount vigorous trial strategies to secure their clients’ rights and entitlements. Located in downtown Vancouver, the firm proudly represents clients throughout West Vancouver, North Vancouver, Coquitlam, Penticton, Kelowna, Richmond, New Westminster, Burnaby, Surrey, Langley, and White Rock. To arrange a confidential consultation for your personal injury matter, please call 604-687-2277 or reach out online.