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Court Awards Damages For Diminished Earning Capacity, Even Though Earnings Don’t Go Down

If you’re injured in a car crash, caused by the fault of another, you could suffer many losses. One loss may be work-related – you may be forced to find an easier but lower-paying job and be unable to earn as much income as before the accident. Lawyers call this loss “diminished earning capacity.” It’s often part of a compensation claim by personal injury plaintiffs.

But what if your earnings don’t go down after the accident? Can you still win damages for “diminished earning capacity”? After all, you might think that because your income didn’t decrease, your ability to earn hasn’t been diminished. Not true.

A recent BC case illustrates that this approach is too simplistic and can be unfair to the injured person.

The plaintiff (Colleen), 46, was injured in two car accidents (one right after the other). She hurt her neck, shoulder and upper back, resulting in chronic widespread pain later diagnosed as fibromyalgia. Before the accidents, she was a highly energetic and motivated individual. She had a fast-paced job as an executive secretary to the president of a large organization, which she loved and was ideally suited for.

All that changed. Because of her chronic pain – which was only controlled or made endurable by large amounts of pain killers and anti-inflammatory medications – she could no longer handle the demands of her job, nor the three-hour (both ways) commute it involved.

Colleen sold her house to move to a smaller home with fewer stairs. Because of her injuries, she also found a new, less demanding job that only involved a 20-minute commute. Having to switch jobs “was a huge blow” and it “was far less rewarding in terms of job satisfaction,” said the trial judge who initially decided her case. Yet, by happenstance, her new job paid her a better salary, and so she didn’t suffer an immediate loss of earnings.

Still, her lawyers were able to prove that she suffered a reduction in her capacity to earn, a finding upheld on appeal.

The circle of secretarial or administrative positions that she could compete for in future had narrowed because of the limitations imposed by her injuries. In short, she became less marketable as an employee and less capable overall of taking advantage of all employment opportunities that might come her way.

As well, the trial judge concluded that there was a real and substantial possibility that Colleen would have moved up in her organization’s hierarchy to a director position had she been able to stay there – at an increased salary and with improved health and pension benefits. (This particular finding was over-turned on appeal as speculative only, reducing her compensation award somewhat.) And there was a real possibility that because of her injuries (which had plateaued or possibly could even worsen), her working career would likely end earlier than it would have if the accident hadn’t occurred.

Overall, she proved that she had suffered a loss in her capacity to earn future income, as confirmed by the appeal court. The BC Court of Appeal ultimately awarded Colleen $275,000 for diminished earning capacity.

Janice Mucalov, LL.B. for Gertsoyg & Company. This column provides information only and must not be relied on for legal advice. Please call Gertsoyg & Company at (604) 602-3066 for a free legal consultation concerning your particular case.

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