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Claiming Loss of Future Income in Personal Injury Cases

In this personal injury case study the issue of greatest disagreement was the appropriate award for future loss of earnings or loss of income-earning capacity. The ICBC claimant, 42 years old at trial, was involved in a motor vehicle accident in the city of Maple Ridge, British Columbia. The claimant was driving about 10 km an hour when a large SUV came out of nowhere and collided with the right passenger side of the Ford Focus he was driving (Teunissen v. Hulstra, 2017 BCSC 1569)
In Hardychuk v. Johnstone, 2012 BCSC 1359 the Court outlined the principals in dealing with a claim for loss of future earning capacity at paras. 192-196:

[192]    A claim for loss of future earning capacity raises two key questions:  1) has the plaintiff’s earning capacity been impaired by his or her injuries; and, if so 2) what compensation should be awarded for the resulting financial harm that will accrue over time? The assessment of loss must be based on the evidence, and not an application of a purely mathematical calculation. The appropriate means of assessment will vary from case to case:  Brown v. Golaiy (1985), 26 B.C.L.R. (3d) 353; Pallos v. Insurance Corp. of British Columbia (1995), 100 B.C.L.R. (2d) 260; Pett. v. Pett, 2009 BCCA 232.

[193]    The assessment of damages is a matter of judgment, not calculation:  Rosvold v. Dunlop, 2001 BCCA.

[194]    Insofar as is possible, the plaintiff should be put in the position he or she would have been in, from a work life perspective, but for the injuries caused by the defendant’s negligence. Ongoing symptoms alone do not mandate an award for loss of earning capacity. Rather, the essential task of the Court is to compare the likely future of the plaintiff’s working life if the accident had not happened with the plaintiff’s likely future working life after its occurrence:  Lines v. W & D Logging Co. Ltd., 2009 BCCA 106; Moore v. Cabral et. al., 2006 BCSC 920; Gregory v. Insurance Corp. of British Columbia, 2011BCCA 144.

[195]     There are two possible approaches to assessment of loss of future earning capacity:  the “earnings approach” from Pallos; and the “capital asset approach” in Brown. Both approaches are correct and will be more or less appropriate depending on whether the loss in question can be quantified in a measureable way:  Perren v. Lalari, 2010 BCCA 140.

[196]    The earnings approach involves a form of math-oriented methodology such as i) postulating a minimum annual income loss for the plaintiff’s remaining years of work, multiplying the annual projected loss by the number of remaining years and calculating a present value or ii) awarding the plaintiff’s entire annual income for a year or two:  PallosGilbert v. Bottle, 2011 BCSC 1389.

Comparing cases is of limited value in the assessment of awards for future losses, generally. The award for loss of future income involves a comparison between the likely future of the claimant if the accident had not happened and the claimant’s likely future after the accident has happened. The degree of impairment to the earning capacity obviously depends upon the type and severity of the injuries and the nature of the anticipated employment at issue.

When valuing the award for future loss the court must consider the likely duration of the claimant’s prospective working life and must account for negative and positive contingencies which are unique to each case. The final award must be fair and reasonable in all the circumstances. This assessment requires a very fact-intensive, case-specific inquiry.

The established approach to be taken for a future loss of earning capacity in situations where the loss, though proven, cannot be measured in a pecuniary way is the one set out in Brown v. Golaiy (1985), 26 B.C.L.R. (3d) 353 (S.C.) at para. 8:

[8]   The means by which the value of the lost, or impaired, asset is to be assessed varies of course from case to case. Some of the considerations to take into account in making that assessment include whether:

1.               The plaintiff has been rendered less capable overall from earning income from all types of employment;

2.               The plaintiff is less marketable or attractive as an employee to potential employers;

3.               The plaintiff has lost the ability to take advantage of all job opportunities which might otherwise have been open to him, had he not been injured; and

4.               The plaintiff is less valuable to himself as a person capable of earning income in a competitive labour market.

Taking into account the expert economist report of which set out certain appropriate contingencies and other factors  the judge concluded that an award of $320,000 for future loss of income was reasonable.

 ICBC advanced him an amount of $4,155 in partial compensation for lost wages which would have to be deducted from any award for loss of income. In summary, the ICBC claimant was awarded damages as follows:

Pain and Suffering: $110,000
Past loss of earning capacity: $108,245
Impairment of future earning capacity: $320,000
Cost of future care: $44,139
Out of pocket expenses: $3,422
TOTAL: $585,806

Posted by Vancouver personal injury lawyer Mr. Renn A. Holness, B.A. LL.B.

Tags: Future Loss of Income, icbc case examples, loss of earning capacity, Pain and Suffering

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