Loss of Earnings and Diminished Earning Capacity

When you suffer a personal injury, you might spend time in the hospital. Even after you check out and return home, it might be a while before you return to work. In a worst-case scenario, you might never work again. If someone else is responsible for the injuries that you suffered, you deserve full compensation. Turning a personal injury claim into cash isn’t always easy, however.

Damages (Financial Compensation) Arising From a Personal Injury Claim

Damages (Financial Compensation) Arising From a Personal Injury Claim

Damages in a personal injury claim can include:

  • Current medical expenses;
  • Future medical expenses;
  • Current lost earnings;
  • Diminished earning capacity;
  • Incidental expenses such as child care, treatment-related travel expenses, and more.;
  • Pain and suffering;
  • Emotional distress;
  • Disfigurement;
  • Loss of enjoyment of life;
  • Loss of consortium (intimacy and sexual relations); and
  • Punitive damages. 

Damages are not necessarily limited to the above-listed items.

What Does Lost Earnings Cover?

Lost earnings includes:

  • Wages;
  • Overtime pay;
  • Bonuses; 
  • Tips;
  • Used sick leave;
  • Used vacation time; and
  • Any other work-related compensation benefits you lost.

Calculating lost earnings can get trickier if you operate your own business and your income is variable. You are still eligible for compensation, however. A lawyer can help you calculate your losses.

The Difference Between Loss of Earnings and Diminished Earning Capacity

Suppose you suffer an injury that requires a week (5 workdays) of hospitalization. Further, suppose that it takes two more weeks (10 workdays) to recover at home. Your total loss of earnings will amount to 15 workdays. If you make $200 per day, your total loss of earnings will be $3,000. This figure applies just the same even if you used sick leave. Your loss of earnings equals your past losses—in this example, 15 days of earnings.  

Alternatively, suppose you suffer a long-term injury that reduces your working hours to 20 hours per week instead of the 40 hours you were working. If you were making $200 per day previously, you are losing $100 per day because of your injury from now until whenever (if ever) you fully recover. Your diminished earning capacity equals your anticipated loss of earnings in the future–potentially all the way to retirement.  

How To Prove Loss of Earnings

Following are some suggestions on how you might prove past lost earnings:

  • A signed letter (or testimony) from your employer that provides all of the information necessary to calculate your loss of earnings to date.
  • Pay stubs;
  • Bank statements;
  • Tax returns;
  • Business records (if you are self-employed);
  • A statement (or testimony) from your accountant.

You might need other evidence as well, depending on the circumstances. 

Diminished Earning Capacity: Why You’ve Got To Get It Right the First Time

Claiming diminished earning capacity is all about calculating your future losses and demanding the appropriate amount to compensate you for those losses now. You only get one bite at the apple here. 

Suppose, for example, you cannot work again because of your injuries and that you claim an inadequate amount of money in your personal injury claim. Flash forward to 10 years from now. You have run out of money, but you are still unable to work. What can you do? Very little, unfortunately. One action you cannot take is to return to court or the bargaining table to ask for more money. By then, it will be too late.

How To Prove Diminished Earning Capacity

It’s a lot more difficult to prove speculative future losses, as you do when proving diminished earning capacity, than to prove the amount of losses you have already suffered, as you do when proving lost earnings.

Elements of Proof

Proving the total compensation you deserve for diminished earning capacity might require you to assemble:

  • Documentation of past income that you might prepare to prove lost earnings (a letter from your employer, pay stubs, or another similar piece of evidence.);
  • Testimony from an expert medical witnesses explaining how your injuries have affected your ability to perform your job tasks, now and in the future;
  • Testimony from your boss concerning how your work capacity diminished after your accident;
  • Testimony from a vocational rehabilitation expert to estimate the extent of your eventual return to your previous position (or to any position at all); and
  • Testimony from an economic expert to estimate your future earning capacity in light of your injuries. 

Don’t let the foregoing emphasis on testimony discourage you from settling your claim out of court. You can elicit under-oath testimony using the pretrial discovery procedure even if you never go to trial. 

Why age matters

Imagine you suffer a permanently debilitating injury at 25 when you have 40 years remaining until retirement. Compare that with the same injury afflicting a 60-year-old worker with five years remaining until retirement. The difference might not matter if your disability is expected to continue for five years or less. If your injury is permanent, however, it means the difference between five years of lost income versus 40 years.

Talk to a New Port Richey Personal Injury Lawyer

If you have lost more than a few days of earnings, and especially if you have suffered long-term diminished earning capacity, you need a lawyer to help you with your claim. Hiring a top-quality lawyer now could result in a payoff that will continue to benefit you years or even decades from now. Your choice of New Port Richey personal injury lawyer could turn out to be the most important decision you make in your entire case. Roman Austin Personal Injury Lawyers can help advise you on the viability of your claim and how best to proceed. Contact us to schedule a free consultation at (727) 815-8442.