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Loss of Future Earnings Awarded Despite Increase in Salary


When a claimant suffers a personal injury in a car accident the loss of income may not occur right after the injury but can take years to manifest. In this case review we examine the case of a young lawyer suffering a chronic pain condition at the beginning of her career.(Harry v. Powar,2018 BCSC 845)
The claimant was injured in two car accidents. First, a taxi struck her when she was crossing the street in downtown Vancouver.  Part way through the trial, ICBC admitted their insured was at fault for this accident.  She was injured in a second motor vehicle accident when a vehicle, driven by a friend, was rear-ended.)
The claimant was a new lawyer at the time of the car accidents. She claimed a loss of capacity to earn despite the fact that her earnings have steadily increased from the time of the accidents to the time of trial.  She did not seek any compensation for loss of earnings from the date of the accidents to the time of trial.
Her personal injury lawyer argued however that the medical evidence established that her ability to work as a full time lawyer in the future has been diminished because of the injuries she sustained in the accident.
The judge found that the most significant injuries were headaches, chronic myofascial pain syndrome, cervical facet joint syndrome and lumbar facet joint syndrome.
The judge applied the capital asset approach and considered factors such as i) whether she had been rendered less capable overall of earning income from all types of employment; ii) was less marketable or attractive as a potential employee; iii) lost the ability to take advantage of all job opportunities that might otherwise have been open; and iv) is less valuable to herself as a person capable of earning income in a competitive labour market. Though the capital asset approach is not a “mathematical calculation”, the trial judge must still explain the factual basis of the award.
In awarding the claimant $105,000 for future loss of earnings the judge explained,

[136] Using the loss of capital asset approach, Ms. H. seeks an award of loss of future earning capacity of $234,000 being equivalent to two years of her net earnings.  The Defendants submit that the probability of future losses are low and thus the award should be minimal to reflect that small chance.  The Defendants submit that negative contingencies should be applied to the award “which reflect the uncertain trajectory of an associate’s legal career and the uncertain effect of as of yet un-attempted treatment modalities”.

[137]     Darren Benning, an economist, provided an opinion about the value of the loss of future earning capacity.  The valuations depended on the findings of the court regarding the loss, if one was found. He provided a number of different scenarios to calculate Ms. H.’s loss based on certain assumptions.

[138]     During cross-examination, the defendants presented a scenario to Mr. Benning for calculation purposes that assumed Ms. H. would lose $10,000 a year for four years.  Based on those assumptions, Mr. Benning calculated the present value loss to be $32,030.  $10,000 was presented as a figure that could reflect the “missing billings” that Ms. H. could not achieve because of her injuries. 

[139]     I am satisfied, based on the totality of the vocational evidence, that Ms. H. has been rendered less capable overall of earning income because of her reduced ability to bill the number of hours she would have but for the accident.  I am also satisfied that she could be less marketable as a litigator and is less valuable to herself as a person capable of earning income in a competitive litigation market.

[140]     Weighing all the different methods of assessment, and the positive and negative contingencies, I consider a reasonable assessment of the plaintiff’s loss of earning capacity to be annually roughly $6,000 taking account her lower rate of earnings, starting from the date of trial to age 64 years (Mr. Benning testified that the average age of retirement for women in the private sector was 64.5 years and not 70 years; I accept this number).  My consideration of these figures takes into account the positive contingency that she will continue to work at her current compensation package with the anticipated increases over her professional life along with the negative contingencies   Applying the multiplier identified by Mr. Benning  which includes labour market contingencies, the present value of this loss is $105,684.  This does not take into account time out of the workforce for pregnancy but is also based on a projected earnings number that is lower than the number presented to Mr. Benning during cross-examination.  As a round estimate, I have calculated Ms. H.’s loss of future earning capacity as at October 30, 2017 to be $105,000.

A summary of the personal injury award is as follows:

1. Pain and Suffering and Loss of Enjoyment $85,000
2. Future Loss of Capacity $105,000
3. Future Cost of Care $57,717
4. Out of Pocket Expenses $10,695.06
Total: 258,412.06

 
Posted by Personal Injury Lawyer Mr. Renn A. Holness, B.A. LL.B.

Tags: icbc case examples, Legal Causation, loss of earning capacity, Soft tissue injury

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