When you suffer severe injuries in an accident that cause you prolonged or permanent disabilities that prevent you from returning to your job or doing other kinds of work, you may have a claim to recover compensation for your loss of earning capacity in your personal injury case. Compensation for loss of earning capacity covers the income you would have earned if not injured in an accident.
Because you cannot demand more compensation from a liable party once you’ve resolved your personal injury claim through a settlement or court judgment, you have the right to seek financial recovery for your loss of potential income in the future in your present personal injury case. However, determining the extent of your loss of earning power requires a more complicated analysis. An experienced Houston personal injury lawyer can determine how much money you deserve to recover for the loss of earning potential.
Understanding Loss of Earning Capacity
What is a loss of future earning capacity? After you’ve sustained debilitating injuries in an accident caused by another party, you have the right to recover compensation for income or wages you miss out on because you cannot work during your recovery. However, you may also have the right to seek financial recovery for your loss of earning capacity. Lost earning capacity refers to the future income lost had you not become disabled from your job or other kinds of work due to accident injuries.
An accident victim may sustain a total loss of earning capacity when their disabilities prevent them from performing any job. However, accident victims can also suffer partial loss of earning capacity if they can still work in a different job or a light-duty or part-time role that pays less than they earned before the accident.
Factors That Influence Compensation for Loss of Earning Potential
The compensation you might recover for your loss of earning potential will depend on various circumstances surrounding the accident, your injuries, and your personal factors. Things that may influence how much money you recover in a personal injury claim for loss of potential income include:
- The nature and severity of your injuries or disabilities. This includes how they restrict you from performing your job requirements or other typical work duties. Some examples are sitting, standing, walking, lifting, remembering, or following instructions
- Your past and current employment, job skills, education, and formal training. These may determine other types of available work within your physical and cognitive restrictions
- Your current age, expected career duration based on your profession, and life expectancy. This determines how much longer you could have worked
- Market demand, which can influence how long you could have remained in your job or profession and the wage growth in that role
- The business performance and financial projections for a sole proprietor’s or independent contractor’s business
Calculating Loss of Earning Power
Calculating loss of earning power involves estimating how much the injured person would have earned during their disability. Estimating lost future earnings starts with a vocational assessment to determine if the victim can work or is permanently disabled. If the victim can continue working despite limitations, they may experience only a partial loss of earning power.
The calculation also requires a determination of the accident victim’s work-life expectancy and projected future earnings based on their profession, industry, and market projections. Expert witnesses can evaluate these variables to prepare opinion reports and testimony estimating an injured accident victim’s loss of potential income. Experts can also calculate the present value of the loss of potential income over your lifetime.
How to Prove Loss of Potential Income
To recover compensation for loss of earning capacity, you must prove that you likely lost the potential income claimed. Proving a loss of potential income may require expert testimony from medical, vocational, and financial experts.
Medical and vocational experts can explain how your injuries and disabilities restrict your ability to earn money. They also identify how long you may remain unable to return to your job or any work. They can estimate how much money you would have made if you had not suffered injuries in the accident. This is based on factors such as your age, work history, education, training, and opportunities for employment advancement. Financial experts can also calculate the value of the loss of potential income during the rest of your life according to today’s dollar value.
Evidence you might use to prove loss of earning power includes:
- Medical records from your treatment and rehabilitation. This includes documentation of prolonged or permanent injuries, medical restrictions on working capacity, and your treating providers’ prognosis
- Educational records, including degrees or certifications you have earned and formal training programs you have completed
- Employment records, including a history of your jobs, titles/positions, and past job responsibilities
- Wage and income records throughout your career and income data from future positions you could have reasonably expected to attain
- Business financial records, if you work as a sole proprietor or business owner or as an independent contractor
Contact a Personal Injury Attorney Today to Discuss Your Financial Recovery for Loss of Earning Capacity
After suffering injuries in an accident caused by someone else’s negligence or fault, you may have the right to seek compensation for your loss of earning potential due to permanent injuries and disabilities that prevent you from working. An experienced Houston, TX, personal injury attorney can fight for the financial relief you need and deserve. Contact Gibson Hill Personal Injury today at 713-659-4000 to schedule a free consultation to learn how our firm can help you through the claims process and hold liable parties accountable for your loss of earning power.
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