Lost earning capacity in a personal injury case refers to your diminished ability to receive an income because of your injury. It differs from lost wages in that it is a projection of future losses, as opposed to losses you suffered in the past. Your earning capacity may be affected by a serious or catastrophic injury that rendered you incapable of fulfilling the duties of your previous job. If your accident was caused by another person’s negligence or intentional acts, you may pursue financial recovery for lost earning capacity. But seeking compensation can be complicated because of the variables involved in calculating the losses. You must analyze several factors about yourself, your injury, and your profession. You might also need to call upon expert witnesses to support your claims. These tasks can be challenging to do without the help of a personal injury attorney.
At Lessem, Newstat & Tooson, LLP, we work toward helping our clients get the compensation they need and deserve after an accident. To schedule a consultation with one of our Los Angeles lawyers, please contact us at (800) 462-7160.
What Is Lost Earning Capacity?
Accident injuries can be serious and/or permanent. In some cases, they can lead to harm that affects a person’s ability to carry out physical or mental tasks necessary for work. For instance, suppose someone was in a sales position and suffered a severe traumatic brain injury that reduced their language skills. The person, once able to eloquently pitch the benefits of their company’s products before their injury, might have difficulty maintaining a conversation with potential clients.
If your injury impacts your ability to work and the effects are expected to continue for some time, your earning capacity may be diminished.
Lost earning capacity is different from lost wages.
Lost wages are those resulting from the time you had to miss from work because of:
- Doctor’s appointments,
- Hospital stays,
- Recovery periods, and
- Other appointments necessary to treat your injury.
In contrast, lost earning capacity is a projection of the income you won’t make because your injury prevents you from working or returning to the position you held before your accident.
Can You Recover Damages for Lost Earning Capacity?
Under California personal injury law, plaintiffs can seek compensation for lost earning capacity. If you are going to file a lawsuit against the responsible party, you must do so before the statute of limitations expires. Generally, you have two years to initiate an action, except in medical malpractice cases where the deadline is 1 year after discovering the injury or 3 years after the incident.
Filing a lawsuit after the statute of limitations has passed can result in your case being dismissed. You lose your right to pursue compensation.
What Evidence Can You Present to Support Your Argument?
If you are seeking damages for lost earning capacity, you must prove that your injury has affected your ability to make a living. This includes income such as your regular salary, commission, bonuses, overtime, and raises. Some of the factors you would have to consider and analyze to prove your claim include the job you were in before your injury, your education, your skills and abilities, and the severity and impact of your injury. You will also have to make projections about possible earnings in your field.
Proving lost earning capacity is often challenging because it is a projection of possible losses rather than losses you have actually incurred. It may be necessary to call upon expert witnesses to give testimony supporting your arguments.
Experts you may have to consult include:
- A medical professional: A doctor can discuss the extent of your injury, the recovery period, and how it could impact your mobility and/or cognitive capacity (and, therefore, your ability to work).
- A financial analyst: An economist can speak to the financial trends in your field and the income you would likely lose out on because of your inability to work.
- A vocational expert: A professional can provide insight into the skills required to perform your previous job and the possible positions you could get (if any) given your injury.
- Your employer: A representative from your company can talk about the organization's promotion and raise policies and your work performance.
Reach Out to an Attorney
It is essential to pursue just compensation after an accident. Working toward obtaining the financial recovery you need requires thoroughly analyzing your case and identifying all the losses you sustained, including future losses. At Lessem, Newstat & Tooson, LLP, we can help gather and analyze evidence to build your case.
To speak with one of our Los Angeles lawyers, call (800) 462-7160 or submit an online contact form today.