Loss of Earnings/Diminished Earning Capacity

Loss of Earnings/Diminished Earning Capacity

An accident or personal injury can cause you to be out of work for a few weeks or months. In some cases, you may not be able to return to work or cannot perform the same type of work because of a permanent impairment. Therefore, lost wages can total thousands or hundreds of thousands of dollars.

If another party caused your injury, you could be entitled to file a claim seeking compensation for your damages. Under Texas tort laws, injured parties are entitled to compensation for economic damages. Lost earnings fall under the category of economic damages.

There are no caps on economic damages in Texas. Therefore, you can seek reimbursement for all loss of income, including future income and lost earning capacity. However, before you can recover compensation for lost wages, you have the burden of proving that the other party caused your injuries. 

How Do You Prove Liability in a Personal Injury Case? 

How Do You Prove Liability in a Personal Injury Case? 

Most personal injury cases are based on negligence. So, you need to prove that the at-fault party breached a duty of care they owed to you. Then, you must prove that the breach of duty directly caused your injury, resulting in your damages.

A Houston personal injury lawyer will handle the investigation to gather evidence, identify the liable parties, and prove liability. Your lawyer will also help you document the extent of your damages to calculate how much your personal injury claim is worth.

What Are Past and Future Loss of Earnings?

Loss of earnings includes the income you lost because you could not work after the accident. If your injuries prevented you from working during your recovery, you include all income you lost from the date of your injury through the date your doctor released you to return to work.

If your doctor placed you on light duty, your ability to earn money decreased. Therefore, you include the difference between what you could have earned and what you earned until you return to work full time. 

The insurance company for the at-fault party will demand proof that you could not work. Your legal team will work with your physicians and medical experts to obtain statements, expert opinions, and medical records to support the fact that the injury impacted your ability to work.

How Do You Calculate Past and Future Loss of Earnings?

You must also prove the amount of your loss of earnings. That requires statements from your employer, your earning history, tax returns, and other evidence of income. 

You can also recover compensation for loss of future earnings. For example, if you cannot return to work because of a total and complete disability, your loss of earnings claim includes the money you would have earned had it not been for the accident. 

Future lost wages are more difficult to prove than past lost wages. Your attorney may consult with vocational experts, economists, and other expert witnesses to calculate your future lost wages. 

Factors used to calculate the future loss of earnings include:

  • Your current age and your retirement age
  • The future outlook for your job or career
  • Your work history
  • Your life expectancy
  • The anticipated inflation rate
  • The  opportunities you would have had for career advancement and pay increases

Expert testimony helps prove how much money you could have earned if you returned to work. That is essential to ensure that you receive maximum value for your loss of earnings, because it isn’t your fault that you cannot work.

What Are Diminished Earning Capacity Claims, and How Do You Prove Them?

In some cases, an injury victim can return to work, but the result of the injury is a permanent impairment. The impairment decreases their earning capacity. Therefore, they have a loss of earning capacity claim.

Loss of earning capacity claims can be more challenging to prove than future lost wages. You can earn some income but not as much income as before the accident. 

You need to calculate how much you would have earned, just like you would if you were entirely disabled. Then, you must calculate how much you will earn based on the type of work you can perform and your wages for that work.

Loss of future earning potential claims rely heavily on expert testimony. You need medical experts to explain your impairment and how that impairment impacts your ability to work. You also need financial experts and vocational experts to prove the difference in income caused by your condition. 

Insurance Companies Fight Future Loss of Income Claims

Insurance companies fight future loss of income claims because those claims can total millions of dollars over a lifetime. If you sustained a catastrophic injury or your doctor has told you that you might have a permanent impairment, it is best to seek legal advice immediately. 

The sooner you have a personal injury lawyer working on your case, the better prepared you will be to fight for the compensation you deserve. 

Schedule a Free Consultation With a Houston Personal Injury Lawyer

Diminished earning capacity and loss of earnings can be a substantial portion of your damages in a personal injury claim. An attorney will work with you to document your losses and maximize your recovery. Contact a Houston personal injury attorney to schedule a free case evaluation to discuss your claim.