Impaired Earning Capacity (not Just Lost Wages)

Most people are familiar with the idea of lost wages: wages or income lost due to injury, for example.  Proving loss of future earnings in a personal injury case is not limited only to the amounts the injured person would have received in the future but for the injury; it also can include damages for “impaired earning capacity.”  The former includes earnings and other payments, such as social security and retirement benefits, attributable to a plaintiff’s “lost years” – i.e., the time by which his or her work life or life expectancy was shortened because of the injury.  Loss of future earnings is typically developed through testimony of an expert economist, based on factors such as a plaintiff’s actual earnings at the time of injury, the plaintiff’s work life expectancy, anticipated job changes, promotions and salary raises, and general economic trends.  “Impaired earning capacity” is closely related to the loss of future earnings, but differs in that it refers to the extent to which the injury interferes with a plaintiff’s ability to advance to a better paying position or an alternative career.  In effect, it compensates for injury to a plaintiff’s earning power.
 
A current case being handled by Janssen Malloy LLP partner Michael J. Crowley illustrates the issue.  Our client was injured in a serious motorcycle collision, and his orthopedic fractures and traumatic injuries required two back surgeries.  Our client was a self-employed full time building contractor prior to the incident, and his injuries have rendered him unable to continue in that occupation.  In addition to his past and future earnings loss due to injury, his earning capacity has been impaired, which is a separate area of compensable injury from just his past wage or income loss.  Damages for impaired earning capacity, like damages for lost earnings, may be awarded to plaintiffs who run their own businesses. (Pannu v. Land Rover North America, (2011) 19 Cal.App. 4th 1298.  A jury may award damages for impaired earning capacity if it is reasonably certain that plaintiff will suffer a loss of future earnings. (Martinez v. Dept. of Health Care Services (2018) 19 Cal. App. 5th 370.)  Expert economic analysis and testimony has been provided to quantify this aspect of his earnings loss.
 
Proving economic loss to one’s earnings capacity requires experienced trial counsel who can demonstrate that loss with the appropriate expert work up and testimony.  Janssen Malloy LLP’s trial attorneys are well versed in the presentation of such damages to ensure that our clients are fully and fairly compensated, and stand ready to assist when need arises.

Tags: