A successful career can take years to build, but one violent car accident can change what you are capable of earning for the rest of your working life. You may have spent decades developing your skills, earning promotions, and establishing yourself in an industry. Then, another driver’s mistake leaves you with an injury that makes your job difficult or impossible to perform. Even if you survive the crash and eventually return to work, your professional future may look nothing like the one you planned. When an accident reduces your ability to earn a living, you may have a right to recover compensation for that loss.
Lost earning capacity addresses the financial damage that continues after the immediate effects of a car accident. This article explains what these damages mean, when you may be entitled to recover them, and what evidence can support your claim. You will also learn how experienceds estimate future losses and what to look for in an attorney who can help safeguard your financial future.
What Is Lost Earning Capacity?
Lost earning capacity is the reduction in your ability to earn money in the future because of an injury. The distinction between this type of compensation and lost wages matters, particularly when your injuries affect your career long after you return to work.
Lost wages generally cover income you have already missed because you could not work. That may include the days, weeks, or months between the accident and your return to employment. Lost earning capacity, on the other hand, refers to the income you may never be able to earn because your injuries have changed your ability to work.
For instance, a back injury can change the kind of work you can do. Before the crash, you may have spent your days on construction sites, overseeing crews and handling problems as they came up. Now, lifting materials or standing for hours may be out of the question. Your employer might find you a desk job, but that does not put you back where you were. The position could pay less and offer fewer chances to move up.
The same issue can arise in other professions.
A surgeon with impaired hand function, a truck driver with permanent mobility restrictions, or an accountant with a traumatic brain injury affecting concentration may face a diminished ability to earn.
You might still be getting a paycheck, but that does not mean your earning potential remains the same. You might not be able to work overtime to earn more. Perhaps you are no longer being promoted, or an injury has kept you out of a higher-paying specialty. The gap may seem small from one year to the next. However, over the course of a career, those lost wages can accumulate to a significant loss.
The focus is not simply on what you earn today. It is on the difference between what you reasonably could have earned without the injury and what you can realistically earn with it.
Can Compensation for Lost Earning Capacity Be Recovered After a Car Accident?
Yes. If another driver’s negligence caused your injuries and reduced your earning capacity, you may recover compensation for lost earning capacity.
Returning to work does not necessarily mean your financial losses have ended. You may earn less, work fewer hours, lose advancement opportunities, or find that your injuries prevent you from remaining in your profession.
The crux of the case is showing that your injuries have reduced your realistic earning potential. Limited restrictions can affect your lost wages, and permanent or long-term restrictions can affect your future income. If the evidence supports your claim, you could receive compensation, but it can be harder to recover it from an at-fault driver.
Is It Possible to Receive Lost Earning Capacity Compensation From an Individual At-Fault Driver?
Yes. If an individual driver’s negligence caused your injuries, you may pursue compensation from that driver. In most cases, however, the driver’s automobile insurance is the primary source of recovery.
That creates a practical problem. A driver may be legally responsible for your injuries but carry insurance coverage that is insufficient to compensate you for the full extent of your losses. If the at-fault driver’s policy has a much lower liability limit, the available insurance may not cover the full value of your claim. Tragically, the policy limit does not necessarily determine the total damages you suffered. It can, however, affect how much compensation you can realistically collect from that insurer.
Fortunately, other options are available. If the at-fault driver’s insurance is insufficient and your policy covers it, your underinsured motorist (UIM) coverage may provide additional compensation. In some cases, you may also be able to target the driver’s personal assets.
So, What Type of Evidence Must You Provide?
To recover compensation for lost earning capacity, you need evidence showing that your injuries have reduced your ability to earn. Your evidence may include several types of records and professional assessments.
- Medical Records and Doctor Notes: Your medical documentation can establish the nature of your injuries, the treatment you received, and the restrictions that affect your ability to work. Records describing chronic pain, permanent impairment, cognitive limitations, or reduced mobility may help explain why your previous job has become difficult or impossible.
- Functional Capacity Evaluations (FCEs): An FCE measures your ability to accomplish physical tasks such as lifting, carrying, standing, and reaching. The results may help establish whether you can safely perform the duties your former position requires. An evaluation can also identify restrictions that affect your ability to pursue other employment.
- Vocational Assessments: A vocational experienced can examine your education, work history, transferable skills, and physical or cognitive limitations. The assessment may compare the career you followed before the accident with the jobs you can realistically perform afterward. It can also help identify whether your injuries have closed off opportunities for advancement.
- Economic Analysis: A financial or economic experienced may estimate the difference between your projected earnings before the accident and your expected earnings afterward. The analysis can account for factors such as wage growth, inflation, and the likelihood of continued employment.
- Employment History: Documentation like tax returns, W-2 forms, pay stubs, performance reviews, and employer statements can establish your earnings and your career trajectory. These records may also show promotions you were pursuing, bonuses you regularly received, or advancement opportunities that became unavailable after the accident.
Not all documents will establish your entire claim. Your medical records may document your physical restrictions, but not necessarily how those restrictions impact your future career. An employment record may include your past earnings, but not what you would have earned.
How well the evidence fits together will affect the strength of your claim. Your injuries, work history, medical restrictions, and expected income should all be consistent.
What Other Evidence Do the Courts and the Experts Evaluate?
Lost earning capacity is not always easy to calculate. You cannot simply multiply your current salary by the number of years remaining until retirement and treat the result as your damages. Courts and experienceds generally consider all of the evidentiary factors listed above and more when evaluating the claim.
The court might also consider some additional factors.
- Remaining Employment Options: Your remaining employment options matter just as much as your past earnings and trajectory. A vocational experienced may examine whether you can return to your former occupation, perform a modified version of your job, or transition into another field. The question is not whether you could theoretically perform some type of work. It is whether the available work realistically matches your abilities and qualifications.
- Labor Market Information: Labor market information can help establish the earning potential of the occupations under consideration. Experts may use wage data, industry trends, and employment projections to estimate what you could reasonably earn. These figures need to reflect your actual circumstances rather than the highest salary someone in your profession might receive.
- Your Work-Life Span: Your expected work-life span also affects the calculation. An injury that reduces your annual earnings by a relatively small amount may create a substantial loss if the reduction continues for decades. Experts consider how long you would reasonably have remained employed and how your injury affects that period.
Remember that these calculations all involve projections. The goal is not to predict every detail of your working life. It is to develop a reasonable, evidence-based estimate of the financial injury caused by the accident. To do that, surround yourself with capable professionals.
First and foremost, this should include a skilled business employment attorney.
What Should You Look For in an Attorney?
A lost earning capacity claim involves more than medical bills and pay stubs. You need a personal injury attorney who understands how to prove the long-term financial consequences of a serious injury.
Look for a lawyer with experience handling complex injury claims and working with medical professionals, vocational experienceds, and forensic economists. These specialists can help establish how your injuries limit your career options and calculate the income you may lose over time.
Your lawyer should also be ready to argue with the insurance company’s claims. An insurance provider may rely on your current income and ignore lost promotions, reduced hours, or lower earning potential in a new job. A trial-tested advocate with negotiation skills, like the attorneys at Keys Law Offices, can counter those assumptions and build an evidence-based case.
Call Keys Law Offices Today!
A personal injury claim handled incorrectly can disrupt the rest of your life. At Keys Law Offices, we are determined to support individuals and families facing these issues and provide advice and representation in your lost earning capacity cases and claims. Our experienced team knows how to investigate and litigate your case to help you recover the compensation you deserve. More importantly, we understand the emotional side of these cases and offer compassionate counsel, so you receive what you are entitled to.
Assistance is available, and help is only a phone call away.
To contact the professionals at Keys Law Offices today, click here.