Calculating Diminished Earning Capacity After an Injury

If you have been seriously injured due to another person’s negligence or reckless behavior, you have the right to seek financial compensation. Not only does this include medical bills and the pain and suffering you endured, but this also includes the wages you lost during your recovery.

But what if your injuries prevent you from returning to the same line of work or limit your capacity to grow your wealth? These damages will also be considered.

What is Diminished Earning Capacity?

Loss or diminished earning capacity refers to income you have not yet earned and will not be able to earn because your injury impairs your ability to work in the future.

For example, an injury as a construction worker might prevent you from ever performing the same tasks again, causing you to seek work in another industry that might not pay well. In other cases, you may be unable to work, period.

What Injuries or Accidents Could Reduce Someone’s Earning Potential?

Injuries or accidents that reduce a person’s earning potential don’t always have to be severe. For example, if your work involved consistently lifting heavy objects and your shoulder was permanently injured, this injury would interfere with your ability to work in the same capacity. You may therefore qualify for lost capacity to earn.

Some of the most common injuries or accidents that could reduce someone’s earning potential include:

  • Severed limbs or other body parts
  • Broken or fractured bones
  • Head injuries
  • Lung injuries or respiratory illnesses
  • Paralysis

How is Loss of Earning Capacity Calculated?

Loss of earning capacity factors in the economic losses you will suffer or are expected to suffer for the period within which a person of similar age and abilities would be expected to work.

Various factors, therefore, need to be considered to give a reasonable prediction of what you would have earned in the future. Some of these factors include:

  • Your life expectancy, based on your health before the accident and your current age
  • How long you would likely have been able to work
  • Your current work experience
  • The projected path of your career, such as the number of promotions you have already achieved and any that you were set to get
  • Your earnings before the accident
  • Existing skills, education level, and other special training
  • The value of your skills and field in the current marketplace
  • Potential future salary raises
  • Your ability to do various aspects of your current job

Proving Loss of Earning Capacity

Proving loss of earning capacity after an injury can be challenging and even complicated. In addition to providing evidence to demonstrate the abovementioned factors, you must also retain expert witnesses such as medical experts and forensic accountants.

These expert witnesses will present evidence to demonstrate your losses. They will show the court how your injury has affected you and how it will work in the future. These experts will further bolster your compensation claim.

Personal injury attorneys have a network of expert witnesses who can review your claim and help determine how much you should be compensated for the loss of earning capacity.

What if You Were Self-Employed?

Predicting the losses of an accident victim that was employed and earning a consistent salary is much easier than dealing with a case involving a self-employed victim. Various factors will need to be considered, including:

  • Your ability to continue participating in your business after the injury
  • The size of the business
  • The profits lost since your injury
  • Tax records showing previous earnings.

Let Our Attorneys Help You Recover All Your Losses

At Kademenos, Wisehart, Hines, Dolyk & Wright Co. LPA, we have the skills, knowledge, and experience to build a strong claim on your behalf to recover everything you lost. Contact our law firm to schedule a consultation for free.