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Compensation for Injuries – Part 4 of 4: Loss of Earning Capacity

Compensation for Injuries – Part 4 of 4: Loss of Earning Capacity

By: Darren Kautz

A significant amount of uncertainty surrounds loss of earning capacity as a head of damage. This form of compensation considers how the injuries suffered by the plaintiff impact his or her ability to work in the future.

Loss of earning capacity takes various forms; the three most popular ones involve the following scenarios:

  1. The injured party is no longer able to return to work after his or her case is settled. Sometimes the injuries are chronic and negatively impact the party’s ability to return to work. This impediment must be quantified and accounted for.
  2. The injured party is able to return to work, however, his or her responsibilities are drastically reduced as a result of the injuries sustained in the accident. In this scenario, the inability to perform his or her usual task may result in reduced hours of work, and consequently, reduced pay. The quantification will consider pre-accident earnings and post-accident earnings to arrive at dollar amount that reflects that loss of earning capacity.
  3. The injured party has lost an employment opportunity as a result of the injuries. In this scenario, the injuries cause the party to miss a promotion or other employment opportunities that he or she would have received if it wasn’t for the injuries sustained. Quantification in these situations is difficult because the causal link between the injuries and missed opportunity may be too remote to establish a connection.

Loss of earning capacity continues to dominate the debate in personal injury law. While in some cases the quantification is straight forward and intuitive, in others it involves careful analysis and advocacy in part of the personal injury lawyer to establish the requisite connection between the injuries suffered and the loss of earning capacity.

Join Kautz Injury Law again next week as I, Darren Kautz, will discuss other areas of personal injury law and the current debates and difficulties that surround them.

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