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How the Law Defines: Loss of Earning Capacity

During this difficult time, we understand that you have many questions about how wrongful death claims work and the kinds of compensation available to you. This is a complex subject, and loss of earning capacity is one of the more confusing areas.

In a personal injury claim, a plaintiff can recover damages for loss of earning capacity. The plaintiff's recovery can include damages for loss of earning capacity both in the past and in the future. To understand loss of earning capacity, it is important to distinguish loss of earning capacity from loss of earnings. Loss of earning capacity is the plaintiff's diminished ability to earn a living. Loss of earnings is the loss of actual income because of the inability to perform a certain job that the plaintiff held before the injury.

In this article we'll look at how the State of Texas defines loss of earning capacity, how to prove up your losses, and how to proceed with your wrongful death claim.

What Exactly is "Loss of Earning Capacity"?

For the sake of a wrongful death claim, loss of earning capacity is divided by loss of past earning capacity and loss of future earning capacity. Let's look at each of these areas separately.

Loss of Past Earning Capacity

The loss of past earning capacity is the plaintiff's diminished capacity to earn a living during the period between when the injury occurred and the date of the trial. The central questions to consider are:

  1. What was the plaintiff's capacity to earn
  2. To what extent was that capacity impaired by the injury

A recovery of damages for loss of earning capacity is not a recovery of actual earnings lost. The amount of compensation is decided entirely by the jury. This is why it is so important to have an experiences attorney looking over your case and making sure you are in the best possible situation to recover a just amount.

Loss of Future Earning Capacity

Loss of future earning capacity, as you might expect, is the plaintiff's diminished capacity to earn a living after the trial. Because the amount of money someone might earn in the future isn't a certain and easy to calculate amount, the jury has considerable discretion in determining the amount of compensation. This is where documentation is so important. We'll look at that next.

A Word About Documentation

Since the jury has the power to decide how much to compensate you for this part of your claim, it is incredibly important to prove up your losses. This is done through documentation.

Proving Loss of Past Earning Capacity

To prove up an award of damages for loss of past earning capacity, you must introduce evidence sufficient to allow the jury to reasonably measure earning capacity before the injury in monetary terms. You should also introduce evidence of past earnings, time missed from work, and any other factors that illustrate the plaintiff's reduced ability to perform work in the past.

For instance, if the plaintiff operated their own business, they should introduce evidence of lost profits, the character and size of the business, the capital and labor employed, and the extent and nature of their participation in the business.

Proving Loss of Future Earning Capacity

This is the same for loss of future earning capacity. You must introduce evidence sufficient to allow the jury to reasonably measure earning capacity in monetary terms. An award of damages for loss of future earning capacity can be based on several of factors that may affect a person's capacity to earn a living. To support an award of damages for loss of future earning capacity, the plaintiff can introduce:

  • Evidence of past earnings
  • The plaintiff's stamina, efficiency, and ability to work with pain
  • Weaknesses and degenerative changes that will naturally result from the plaintiff's injury
  • The plaintiff's work-life expectancy

Please note that the plaintiff does not have to show actual earnings, life expectancy, or even that the plaintiff was employed at the time of the injury.

As you can see, there are many things to consider when taking loss of earning capacity into account. Our Texas attorneys have over 25 years of experience handling wrongful death claims, and we know everything the law has to say about compensation and damages. If you have questions about your claim, or want to get the feedback of a qualified attorney, we're here for you. You can call us at any time, any day, and we'll speak with you. Give us a call at (855) 326-0000 today and put us to work on your wrongful death claim.