Valuing Loss of Earning Capacity

By March 14, 2016Lost Wages

Loss of Earning CapacityLoss of earning capacity can be defined as an ongoing loss of the ability to perform your job at all, or as well as you did before the accident.

For example, if you are a construction worker and you sustain a permanent injury that affects your ability to lift objects more than 20 pounds, your ability to perform the tasks of your job will obviously be reduced. Or suppose you are a teacher and are unable to either sit or stand for more than 15 minutes without extreme pain. This will negatively affect your ability to be employed as a teacher in the future.

It may be the case that your work abilities have been reduced by a percentage, or perhaps you are totally disabled vocationally. This means that there is no job you can reasonably perform, given your injuries. Ultimately, loss of earning capacity is always an issue if you have future or permanent injuries that will affect your ability to work.

How to Be Compensated For Loss of Earning Capacity

The best way to receive compensation for loss of earning capacity is to hire an expert to assess your loss and present his or her findings to a jury. A vocational expert may be consulted to evaluate your job skills, as well as your medical information, and provide an opinion as to how much your ability to perform has been affected by your injury.

If your doctor reports that you are completely disabled and unable to do any work, the vocational expert need only support the doctor’s opinions and indicate that there are no jobs available for you with these limitations. In other words, you are totally disabled from employment and have suffered 100 percent loss of earning capacity.

The expert will need to medically determine exactly which physical and mental limitations you have, and to what extent they limit you. This will be based on opinions from doctors in medical reports and records, as well as interviews wherein the expert asks you a series of questions regarding what you can and cannot do. For example, the expert might ask how long you can sit or stand without discomfort, how much weight you can lift, or how often you get headaches.

Functional Capacity Evaluation Explained

The truthfulness of your answers will be scrutinized by a jury, so the vocational expert may use what is called a functional capacity evaluation (FCE) to support your claims. An FCE is usually conducted by a physical therapist, but might also be conducted by a physician. The evaluation consists primarily of taking measurements of your ability to function physically. This might include testing the following aspects:

  • How much weight you can lift,
  • How long you can sit comfortably,
  • How long you can stand comfortably,
  • How far you can walk without experiencing pain,
  • How far you can bend or flex various parts of your body, or
  • How long you can function in certain situations without pain medication.

These tests are used to determine the extent to which you are vocationally disabled and, thus, the extent of your loss of earning capacity. These tests are often measured by comparing how your abilities have been reduced or lost from:

  1. Your previous level of function,
  2. The average person of your age, or
  3. The average person of your vocation.

The information gathered by the vocational expert is then given to an economist or accountant who calculates how much money you will lose in the future, due to your reduced ability to work. If your abilities are expected to be reduced for a certain number of years, then the calculations are done according to that number. If your reduction is believed to be permanent, then the calculations are made using the date on which you planned to retire or, if that cannot be proven, the average retirement age according to government statistics. These numbers will then be calculated and presented to the jury at their present value.

How Juries Look at Loss of Earning Capacity

Some attorneys argue that jurors are more receptive to lost wages and loss of earning capacity claims when you have tried to go back to work and cannot perform the tasks necessary to fulfill your duties. If you testify during cross-examination that you are able to do grocery shopping, take your kids to soccer practice, go on vacation, do household chores, and so forth, it will be very tough for a jury to believe that you cannot work.

On the other hand, juries realize that working in one’s vocation is often much different than slowly and carefully doing housework. So, if you can explain that you are able to do chores very slowly or in stages, but returning to work and performing your job brings you serious pain, the jury may be more likely to believe that you truly cannot work and are not simply trying to exploit the lawsuit.

Don’t Go It Alone

Unfortunately, calculating loss of earning capacity is very complicated and time-consuming. You need an experienced attorney who can ensure that you get a fair settlement. If you have been injured in an accident, do not rely on the insurance company to make sure you receive rightful compensation. Instead, contact our team of attorneys at Carey, Danis & Lowe by calling toll-free at 877-678-3400 or filling out our online contact form.