Collecting the full and fair compensation you deserve after an accident can be difficult. Not only will you likely be fighting the insurance company every step of the way, but there are also many different types of damages, some of which you may or may not be eligible for.
Lost earning capacity is one type of compensable damage after an accident that could help provide you with additional funds if the accident you endured resulted in your inability to work the same job or at all for the long-term future. However, it’s also an extremely challenging one to prove and successfully collect.
Here’s what you should know about collecting compensation for lost earning capacity in a personal injury case and how a veteran accident lawyer can provide you with the caring and compassionate support you need.
What Is Lost Earning Capacity?
When injuries resulting from an accident make it difficult for you to earn an income in the long term, you may have what is known as a loss of earning capacity, or lost earning potential. This means that beyond your lost current wages, you will experience a significant and long-term future impact to your earnings. In some cases, you may never be able to do the same type of work as you once did or you may even be unable to do any work at all.
For example, if you worked a high paying job that utilized your fingers — such as a surgeon — and a car accident resulted in severe arthritis or even the loss of a digit, you may no longer be able to work as a surgeon. You may need to take a lower paying job and may never be able to earn the same or a comparable amount of money as you did before the incident.
It’s this disparity in future wages – the difference between what is and what would have been if not for the accident – that should be compensated for by the at-fault party.
The Difference Between Lost Wages and Lost Earning Capacity
Many people get lost wages and lost earning potential confused. While they sound the same, they’re actually two separate compensable losses.
Lost wages, or lost income, refers to the funds you would have received from your job after the accident to the time you receive a judgment or settlement. This differs from lost earning capacity is that it refers specifically to the wages you were not able to earn between the time of the accident and the time of your settlement. Loss of earning capacity applies to future work and your ability or inability to earn the same wages or any income at all.
Types of Accidents That Cause a Loss of Earning Capacity
Almost any accident or injury can result in the loss of earning capacity. Some examples include the following:
- Car accidents
- Truck accidents
- Motorcycle accidents
- Bicycle accidents
- Pedestrian accidents
- Dog bites
- Traumatic Brain Injuries (TBI)
If you were injured in any type of accident and can no longer perform the same work as you once did, this is considered lost earning capacity.
How to Calculate Lost Earning Capacity
Calculating lost earning capacity is complicated and typically requires the help of an expert in the subject. Various factors come into play when considering lost earning ability, including length and type of work history, the victim’s education and learned skills, the current pay rate for employees with similar backgrounds, and the employee’s history of obtaining raises, bonuses, and other financial incentives.
Other issues that may impact the calculation of lost earning capacity include but aren’t limited to inflation rates, changes to state or federal minimum wage requirements, etc.
Proving Lost Earning Capacity
The burden of proof for lost earning capacity rests on the plaintiff in an accident case. You must be able to show compelling evidence that your earning capacity has been significantly lowered as a result of the incident and that you expect this to remain the same or worsen over time.
It must also be established that the accident in question is what directly caused your loss of earning capacity and that no other factors are involved, such as naturally occurring arthritis, an older injury, etc.
Offering Expert Testimony
Your case for lost earning capacity restitution can be made stronger by working with a forensic accountant. A forensic accountant is able to dig much deeper into your future earnings than the average person.
They use complex formulas to calculate the regular pay increases, tax incentives, and bonuses you would have received over time, offering a significantly more accurate testimony as to the earnings you have lost and/or will be losing as a result of the accident.
Contact the Experienced Salem Personal Injury Attorneys at Mazow | McCullough, PC
At Mazow | McCullough, PC, we understand how devastating accidents and injuries can be for victims and their families. Our experienced personal injury lawyers in Salem, MA are dedicated to providing victims and their loved ones with veteran legal support. Contact us today by dialing (978) 744-8000 or call toll free at (855) 693-9084.
Serving injured people, consumers, and their families in both Massachusetts and New Hampshire.