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Loss of Earnings/Diminished Earning Capacity

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Loss of Earnings/Diminished Earning Capacity

The effect of your injuries on your ability to work might be central to your damages claim. The greater the impact on your job and career, the greater the damages you will seek.

This issue will arise because your compensation covers the impact of your injuries on your income. But it will also arise because your compensation covers the impact of your injuries on your quality of life. If you cannot work, you have lost an essential part of having a normal life.

Here is an overview of how you can seek compensation for loss of earnings and diminished earning capacity.

Types of Damages in an Injury Case

The damages you can seek in an injury case fall into two categories:

Economic Damages

Economic damages include all of the ways your injuries affect you financially. These can include:

Past and Future Medical Expenses

You can get compensated for expenses you have incurred or will incur due to your injuries. These might include costs for the following:

  • Examinations
  • Surgery
  • Physical therapy
  • Medication

Suppose that you tore your anterior cruciate ligament during a motorcycle accident. Your damages will cover the past and future medical expenses associated with the torn ligament.

Lost Income

Your damages include the income you lost due to your injuries. This can include income losses from:

  • Missing work for medical appointments and physical therapy sessions
  • Shorter hours due to physical limitations from your injuries
  • Reduced productivity due to disabilities caused by your injuries
  • Lower pay due to a change in job duties to accommodate your injuries

If you work as an independent contractor or you own a business, your lost income will include the drop in your business revenues while you recover from your injuries.

Diminished Earning Capacity

Diminished earning capacity refers to the future loss of income that comes from a permanent or chronic disability.

For example, a truck driver might need to give up long-haul trucking due to back pain from a truck accident. The truck driver might have the qualifications to work in other jobs in the trucking industry. But if those jobs pay less, the accident was directly to blame for the diminishment in earnings.

Non-Economic Damages

Non-economic damages represent all of your losses due to a reduced quality of life caused by your injuries. Non-economic damages include losses like:

  • Physical pain
  • Mental suffering
  • Inconvenience
  • Inability to perform tasks like driving or showering
  • Reduction in your enjoyment of life

While it might seem like a form of economic damage, the inability to work can also fall under non-economic damages.

Like the inability to drive, shower, or dress, the inability to perform your job duties has a non-economic effect on you. You become dependent on others and lose part of your identity when you cannot work. Your confidence drops, knowing you cannot support yourself or your family. You might suffer from worry and sleepless nights over finances.

All of these non-economic effects will diminish your quality of life.

Proving Work-Related Damages

Your damages will tie directly to the evidence you can supply about the impact of your injuries on your work. But different types of damages will require different types of evidence.

Economic damages require you to show the financial impact of your injuries. If you can only show, for example, $5,000 in economic losses, the jury can only award $5,000 in economic damages.

Non-economic damages do not require you to prove the value of your losses. Instead, you provide evidence of the severity and duration of your injuries. The jurors will presume you were damaged based on your injuries and exercise their judgment to calculate a fair damage award.

Some examples of evidence that you can use to prove your losses include:

Loss of Earnings

These losses come from your wage or salary statements. The jury will simply add up all of the money you did not receive due to your injuries.

Diminished Earning Capacity

These losses are a bit more speculative. You will probably have your old wage or salary statements and your new wage or salary statements. The jury can then calculate the difference and multiply it across the remainder of your working life.

For example, suppose that you receive a $5,000 per year cut in pay and you are 40 years old. A jury could reasonably calculate your diminished earning capacity by multiplying $5,000 by the 25 years remaining until you reach retirement age.

Inability to Work

Inability to work is a form of non-economic damages. You will present evidence of the severity and duration of your injuries, and the jury will presume your losses.

Thus, if you lost a finger in the accident, the jury may consider that this will hamper your ability to work. The jury might then award damages for this loss.

Lawyers understand the evidence you need to prove your damages. Your lawyer will rely on you to help gather evidence to prove your work-related damages. To discuss how you can prove your loss of earnings and diminished earning capacity, contact our Shaked Law Personal Injury Lawyers for a free consultation.