If you have been injured in a car collision in Oregon or Washington, you may have a claim for lost income the injuries caused against the responsible driver's insurance carrier. Keep in mind that you may not have to wait until you make your claim against the other driver's liability carrier, and can qualify for an upfront disability benefit from your personal injury protection carrier.
Many lost wage claims are straightforward. Our client is injured in a collision that disables them from work for a finite period of time. The employer provides proof of prior income, and we can easily calculate the amount our client would have earned if they had not been injured in the collision.
Serious and permanent injuries present other issues. Our client's injuries may prevent them from returning to their job, or any job for that matter. Because the losses extend into the future, the claim is different, presents unique challenges.We also represent self-employed clients running their own business. Because our client may not be earning significant income on paper, they still may suffer significant losses due to increased expenses or lost business opportunities. These cases also require a closer look.
Future Lost Income
Predicting the future can be difficult, but with the right information, and economist can often help us determine lost future earnings our client suffered because of a serious and permanent injury. Many factors come into play, including past earnings, our client's skill set, whether they are able to adapt to other work, and their efforts to find some other kind of work. Economists also consider the value of money over time.
Keep in mind that anyone who is injured and suffers a loss must "mitigate" their damages. To mitigate is to minimize the loss. If an injury keeps somebody from pursuing their prior work, they have a responsibility under the law to minimize their loss and find work they can physically perform. When an injured person finds other work, he or she still may claim the difference in income they would have earned had they never lost their job because of the serious injury.
A common defense to future lost income claims is the argument for "present value." If somebody is making a claim for lost income over the next twenty years, for example, it does not necessarily mean that the injured person should recover the full amount of the future lost income. Instead, the injured person may be only entitled to the money that, if set aside in a savings account, would earn enough interest over the next twenty years to equal the total future lost income. This is referred to as the "present value" of the lost income. The argument is that if you compensate a person for future lost earnings by paying the total amount up front, that person could earn interest on that money, and will be over-compensated. Often, economists are retained as expert witnesses to calculate the present value of the future lost income claim, and account for the impact of inflation on the cost of money.
Lost Earning Capacity Distinguished
Claims for lost future lost earning capacity differ slightly from a claim for actual future lost income. Instead, it is more accurately described as a claim for the future inability to do certain kinds of work. Many of our clients work in physically demanding occupations on a seasonal basis, and a serious injury has taken away the ability to pursue that job opportunity. There are also cases where somebody is not actively employed when they suffer a serious injury, but because of their injury, future earning opportunities have been lost. These claims require documentation, and often we enlist the help of an economist or a vocational expert to explain the future lost opportunities our client suffered as a result of a serious life changing injury.
Self-employed folks face their own unique challenges in documenting lost income. Self-employed clients often pour their heart and soul into making a business work, and build “good will” into the business. Sometimes, the lost income may be documented with the increased expense of having to contract out or hire additional help. In other cases, the lost income may be missed future business opportunities. This is another area where experts may be called into to calculate the actual impact to our injured self-employed client.
As with any claim for damages, there must be a direct connection between the lost income and the injury or disability. Defense attorneys and insurance adjusters commonly argue that the lost self-employment income claims are speculative, or occurred for other reasons, like normal business cycles or “market conditions.”
If you have suffered an injury and have questions about documenting a lost income claim, contact us. We have helped many people with lost income claims as part of their personal injury case.