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 income—in other words, wages or other earnings that were 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. First, the injured party presents evidence of their injuries and expert witness medical testimony to establish that they've been unable to return to work as a result of their accident. Then, the injured party presents testimony and documentation from their employer that confirms:
This is why, if you've been injured, it's crucial to obtain copies of your medical records and to document how your injuries have affected your ability to work.
Future lost earnings are more difficult to prove because there's always some amount of speculation involved. Injured parties typically experience some degree of recovery over time that will eventually allow them to return to work. This could be on either a part-time or full-time basis, and might be in a different role or even a different line of work than what they were doing before the accident. This variety of possible medium- and long-term outcomes makes proving future lost earnings (or "loss of earning capacity") something of a challenge.
A few examples will help to illustrate how complex it can be to estimate how much earning capacity a person has lost because of an injury.
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 and pre-accident health, along with 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.
An inability to work because of emotional or psychological trauma is related to, but a little different from, the kind of damages typically referred to as "pain and suffering." With typical pain-and-suffering damages you don't have to show that you're unable to work. The injured motorcyclist, for example, might receive compensation for pain and suffering by showing that she has recurring nightmares about the accident and is now too anxious to enjoy riding her motorcycle as a hobby.
In addition to these "non-economic" damages, the motorcyclist can also make the case that the psychological and emotional trauma of the accident has impacted her future earnings. She'd prove this in the same way she'd prove a purely physical inability to work: by presenting evidence of the nature and extent of her injuries, and of how those injuries will affect her earning potential in the future. This evidence might include:
As with the first example above, this testimony will likely be disputed by the at-fault driver's expert (or experts). The jury will have the difficult task of determining the extent of the motorcyclist's psychological and emotional injuries and to what extent she'll eventually be able to return to work. One challenge for plaintiffs in cases like this is that judges and juries are often more skeptical of psychological injuries than they are of injuries like broken bones and cuts that they can see in x-rays or photographs.
Finally, consider the case of a pedestrian who is hit by a truck while lawfully crossing the street, and is paralyzed from the waist down.
This claim might play out differently depending on the pedestrian's job before the accident. What if the claimant's pre-accident job consisted entirely of computer work performed remotely at home? That might mean they could adjust to their new circumstances and continue to do the same job. But an injured person is entitled to present evidence of how their injury affects their broader career prospects. This person's inability to pursue opportunities that would have been open to them before the accident is a factor in calculating future lost earnings.
On the other hand, what if the claimant worked in a warehouse in a role that involved driving a forklift and carrying heavy boxes? Here, it's more straightforward to show that the injured person will never again do that kind of work. But that doesn't necessarily mean their future earnings have dropped to zero. The experts retained by the truck driver's legal team will want to argue that, based on existing skills or the ability to learn new ones, the injured person will eventually be able to earn money doing work that doesn't require the same amount of mobility.
As you can see, calculating future lost earnings can involve complex questions about a person's long-term medical prognosis and its impact on the kind of work they can be expected to perform for years and even decades to come.
In any case where future lost earnings are sought, evidence will have to be offered on the length of time the person reasonably could have been expected to continue 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.
An award of future lost earnings will also be reduced to present value. Courts recognize that a dollar earned today is worth more than a dollar earned in the future. So, a claimant who receives payment after a jury verdict or settlement will get less money up front than you'd expect just from adding up all of their lost future earnings. However, present value reductions are often offset by evidence of the way a person's injuries will harm their career progress and prevent them from receiving as many raises or promotions as they otherwise might.
You can read more about lost earnings claims in car accident cases, and about how much compensation you can expect to receive if you've been injured because of someone else's negligence. As this article shows, if you've suffered a significant injury that may affect your future earning potential it can be complicated and time-consuming to calculate your damages and get a fair settlement or jury verdict. You can put yourself in the best position by consulting an attorney who can advise you of your options and handle your legal claim.