The hazy target of lost earning capacity

A personal injury lawyer Little Rock, AR trusts will tell you that determining lost earning capacity as part of damages in a personal injury case is a difficult yet necessary task.  Steve Harrelson of the Harrelson law firm states that it’s necessary to determine the anticipated loss of future income through the assistance of a physician and vocational expert.

“One of the most important things to do when developing your case for economic damages,” says Harrelson,” is to make sure that you properly calculate for the loss of future income and show the jury hard numbers of how the injury has affected your life.”  Doing so will require some knowledge of salary actions, employer paid benefits for lost earnings, inflation, consideration of future raises, potential diminished earnings, and loss of household services.

Diminished Earnings

The most important number to obtain from your experts is the percentage of anticipated diminished earnings.  Whether that figure is 10%, 20%, or 50%, it gives you a baseline from which to begin determining lost income.  From that point, subtract your age from your expected retirement age of 65 to determine the number of years of work anticipated.  Normally, you would then simply multiply the number of years by the amount of lost revenue each year (an example might by 19 years x 20% of $50,000).

However, this value does not account for inflation and the requirement for the final, future value to be a present value.  It will require some forensic economics to adjust that calculation, along with an explanation for the jury.  At that point, it is essential in a claim for lost earning capacity to add all other factors to your claim: (1) anticipated raises over the course of your career, (2) the amount of any lost benefits, (3) shortened life and shortened work life, (4) diminished earning capacity due to the injury, and (5) non-work related activities such as loss of household services.

Conducting a full investigation like this is the only way to maximize your compensation.  As a personal injury lawyer might attest, compiling a full report regarding lost earning capacity to submit to the insurance adjuster (or potentially a jury) is important in order to be fully compensated for the injuries you sustained.  Simply taking your medical bills and lost wages and asking for the jury for “pain and suffering” will not be sufficient to compensate you for your losses.  Pain and suffering is a financial consideration, but it is subjective in nature and can be difficult to justify and defend.  That’s why it’s important to perform a complete review of your actual losses and anticipated losses in order to be fully compensated.

For these reasons, it is always best to contact a lawyer to help you through a situation like this to (1) help you through the process while you’re recovering and (2) to maximize your benefits to ensure all of your injuries are appropriately compensated.


Thanks to Steve Harrelson and our friends and co-contributors from Harrelson Law Firm, P.A. for their added insight into the calculation of lost earning capacity in personal injury cases.

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