When a personal injury claim includes serious harm and extensive medical treatment, it's not uncommon for the claimant to temporarily or permanently lose the ability to return to work. When an injured person can't work, either because of physical limitations or emotional trauma resulting from the accident, any lost earnings are a component of compensable personal injury damages. But as with all other types of damages, if no personal injury settlement is reached, the injured person's lost earnings (both past and future) must be proven by a preponderance of the evidence if the case makes it all the way to trial.
Past lost earnings—in other words, income that was lost up to the point where the injured party's claim is settled out of court or resolved after a court trial—are relatively easy to prove. Once it is established (usually by expert witness medical testimony) that the injured party has been unable to return to work as a result of the injuries suffered in the accident, the evidence needed to prove past lost earnings typically consists of testimony and documentation from the injured party's employer that confirms:
(Learn about lost earnings claims in car accident cases.)
Future lost earnings are more difficult to prove because injured parties typically experience some degree of recovery over time that will eventually allow them to return to work on either a part-time or full-time basis. This kind of middle ground makes proving future lost earnings (or "loss of earning capacity") something of a challenge.
A few examples will help to illustrate this challenge.
First, consider the case of a person who suffers fractures that require them to be in a body cast for two months. While the fractures will heal over time, the person will clearly sustain lost earnings for the period they are in the body cast.
The unknown factor is how long it might be, once the cast is removed, before the claimant will be able to return to work. The answer to this question will depend on the claimant's age, pre-accident health, and the nature of their job duties.
More importantly, testimony from medical experts will be needed to establish the time it will take the person to regain the strength and functionality to perform their job duties. If a personal injury lawsuit reaches the trial phase, these are issues that may be contested by the at-fault party's witnesses, and will ultimately be decided by the judge or jury.
Let's take the case of a motorcyclist who sustains a closed head injury in a crash caused by someone else. Even though the motorcyclist is physically able to return to work, her closed head injury has caused traumatic emotional injuries that prevent her from functioning in her workplace. (These types of damages are typically a component of the claimant's "pain and suffering.")
In order for her to receive a personal injury damages award for future lost earnings, she will need to present expert medical testimony from a neuropsychologist or psychiatrist to establish the nature and extent of her closed head injury, as well as the amount of time the expert believes she will be disabled.
As with the first example above, this testimony will likely be challenged by the expert(s) retained by the at-fault driver, and the jury will have the difficult task of determining when, if ever, the motorcyclist will be able to return to work.
Finally, consider the case of a pedestrian who is hit by a truck while lawfully crossing the street, and is paralyzed from the neck down. Even though it seems apparent that this person will never return to work, it is possible that they can regain enough functionality to perform tasks on a computer. If the claimant's pre-accident job consisted mostly of computer work performed remotely at home, the experts retained by the truck driver's legal team will likely argue that the claimant may be able to return to work in some capacity at a future date.
In making this argument, the witnesses may cite research and advances in treatment pointing to a realistic chance that the person might one day regain the use of his arms and/or legs. As you can see, this type of case poses many difficult issues related to the question of future lost earnings.
In any case where future lost earnings are sought, evidence will also have to be offered on the length of time the person can be reasonably expected to have continued working; most juries are very unlikely to (and may be specifically instructed not to) award future lost earnings for a period beyond what would be considered normal retirement age.
Finally, an award of future lost earnings must be reduced to present value, since a dollar earned today is worth more than a dollar earned in the future. However, present value reductions are often offset by evidence of earnings increases expected to be received by the injured person from raises and promotions as their career progresses.
Learn more about how much you can expect to get in your personal injury case.