Loss of Earnings/Diminished Earning Capacity

Many accident victims lose time from work while they recover from injuries. When another person causes your injury, you can recover compensation for your lost wages. However, you may also be entitled to compensation for future loss of earnings and diminished earning capacity.

Table of Contents

Filing a Claim for Loss of Earnings After an Accident or Personal Injury

Loss of earnings is a type of economic damage. Economic damages represent the financial losses you incur because another person causes you to be injured.

A loss of earnings claim may be filed in all types of personal injury cases, including:

Before you can recover compensation for loss of earnings, you must prove that the other party is responsible for your injuries. Generally, that requires that you prove the other party owed you a duty of care and the party’s conduct breached the duty of care. Then, you must prove the breach of duty caused your injuries and damages.

However, proving fault and liability does not guarantee you recover money for a loss of earnings claim. You must also prove that your injuries impacted your ability to earn money.

The insurance might dispute that your injuries prevented you from working. The company could request an independent medical examination by a doctor it chooses to verify whether your ability to work is impaired because of your injuries.

The next hurdle is proving the damages for the loss of income. In other words, you must provide evidence to prove the amount of money you would have earned had you not been injured.

Evidence of lost wages may include statements from your employer verifying your income, work history, and period of time out of work. Other evidence to prove lost earnings include copies of pay stubs, tax returns, income statements, and other evidence of past earnings.

Issues that can complicate a lost wages claim include:

Self-employment
Commissions
Bonuses
Claims including loss of benefits
Multiple jobs
Seasonal work

If you are unsure how to prove your loss of income, you should seek legal advice before settling a personal injury claim. The insurance company will try to undervalue your claim.

Claims for Loss of Earning Capacity

If you sustain permanent impairments or disabilities, you can seek compensation for lost earning capacity. Earning capacity refers to the amount of money you could earn if you could continue working given your present circumstances.

Being partially impaired can result in decreased future income. The impairment may prevent you from earning as much income as you could have earned prior to your injury.

However, proving the difference between what you could have earned and what you are capable of earning now requires specialized financial and medical knowledge. Therefore, you may need to retain vocational, financial, and medical experts to prove how much your diminished earning capacity claim is worth.

Filing a Claim for Loss of Future Earnings

Expert testimony might also be required if you file a claim for future lost wages.

Medical experts testify regarding how the severity of your injuries prevents you from performing any work to earn income. Financial experts testify about how much money you could have earned had you been able to continue working.

Factors that expert witnesses use to calculate the value of a future loss of earnings claim include:

Your age and health
The career or job you held
Your experience, skills, and education
The anticipated outlook for your career
Your expected retirement age
The anticipated inflation rate
Whether you can perform another type of work
Your opportunities for pay increases and career advancements

If you are completely disabled because of an accident or injury, your future lost wages could total millions of dollars over your lifetime.

The insurance company will likely fight your claim to avoid paying a large settlement or jury verdict. Therefore, you need to be prepared to provide expert testimony and compelling evidence proving the value of your claim.

Do I Need a Lawyer for a Loss of Earning or Diminished Earning Capacity Claim?

If you were out of work for a short period and can calculate the amount of money you lost while recovering from injuries, you might not need legal assistance with a claim for loss of earnings. However, lengthy recovery periods, impairments, and other issues can complicate your case.

The insurance company will not tell you if you are entitled to more money for your injury claim. Instead, it wants to pay as little as possible to resolve your claim.

Therefore, it is always in your best interest to talk with a lawyer before settling a personal injury claim. An attorney provides an honest assessment of your claim, including the value of all damages.

Schedule Your Free Consultation With Our New York Personal Injury Lawyers

You deserve to recover compensation for all past and future losses of income. Contact our law firm to schedule a free case evaluation with an experienced personal injury attorney. We fight to recover full compensation for all damages you sustain because of another party.

Our personal injury law firm in NY, NY also provides: