When you decide to file a car accident lawsuit against the person responsible for the crash (the "defendant"), you (the "plaintiff") are allowed to recover any lost wages that resulted from the accident.
The most obvious example is when a physical injury, like a broken leg, prevents you from doing your job. In that case, you are entitled to recover the wages you would have received had your leg not been broken and had you still been able to work. If you couldn’t work for two months, then you are entitled to recover the amount you would have normally been paid during those two months. Other debilitating and disabling car accident injuries -- including psychological injuries caused by the accident, like PTSD -- are also grounds for recovering lost wages, if they are severe enough.
If a traffic accident causes a permanent or long-lasting disability that affects your ability to earn money for an indefinite time into the future, then you may be able to recover damages for "lost earning capacity."
Even if you can still work, you can recover if the disability prevents you from having a higher paying job than you likely would have had if not for the disability. Keep in mind that chronic pain and general loss of stamina and endurance usually qualify as disabling injuries.
To recover for lost wages and/or lost earning capacity, the auto accident must be the direct cause of the injury that prevented you from working. However, that does not mean that pre-existing injuries don’t count.
If the accident made a pre-existing injury worse so that now you cannot work -- or work as well as you could before the accident -- you can still recover the full amount of your lost wages and/or earning capacity.
The easiest way to prove lost wages is to submit your most recent paycheck prior to the injury. If you are self-employed, you’ll need to submit proof of what you normally would have earned, for example invoices from the same period during the previous year. You can also recover for lost tips and other non-salary benefits if you have decent proof.
It is a little more tricky to prove lost earning capacity, since some speculation about the future is necessary. Depending on your line of work, and the type and severity of the injury, the fact that you will have a diminished earning capacity can often times be assumed (i.e. you only have to prove the injury, not what will happen because of it).
The harder part is proving how much you should recover. Comparing paychecks before and after the injury is the easiest way to prove the extent of lost earning capacity, but it is often not that simple.
Usually, some type of financial or economic expert witness will be necessary to figure out a ballpark number for what you would have earned were it not the disabling injury, minus what you will likely earn given the disability. Evidence (usually testimony) about your character traits and work habits, education and intentions to change careers can also be factored in. Matters can be made more complicated if your disability is unlikely to be permanent and a best guess is needed about how long it will last.
For all these reasons and more, often the biggest litigation battle after a car accident involving a serious injury is not who was at fault, but the nature and extent of the injured person's damages. If the case actually goes to trial, the jury has a lot of leeway to choose how much should be awarded -- they are allowed to use their “common sense” to pick a number, even if the proof is vague and speculative (as long as it isn’t too vague and speculative).
Learn more about Damages in a Personal Injury Case.