Proving Lost Income and Lost Earning Capacity in The Oregon Injury Claim

Introduction

Often, establishing a claim for lost income and in Oregon or Washington auto injury case is straightforward. A person is injured, a physician takes them off work. The disability ends, and a simple calculation is used to figure out the lost income. This happens occasionally, but often the issue is not so straightforward.

Lost income is a form of "economic" damage in Oregon, and a form of "special" damage in Washington. This simply means this loss is objectively verifiable. When making a demand for settlement with an insurance company, or proving these claims to a jury, the best practice is to over document this loss. At a minimum, there should be prior earning records, written notes from the physician authorizing our client to be off work, and an accurate calculation of the actual income lost because of the injury or disability.

Future Lost Income

Proving something that already happened is always much easier than proving something that will happen in the future. It somebody suffers a serious injury and can no longer work a certain occupation, then there is a potential claim for future lost income. However, there are two important considerations.

First, anyone who is injured and suffers a loss must "mitigate" their damages. If an injury keeps somebody from pursuing their prior work, they have a responsibility under the law to do their best 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 because of the injury’s permanent impact on work ability.

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 future lost income.  Instead, the injured person may be only entitled to the money that, if set aside in a savings account, with 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 earning capacity, or future lost earning capacity differs from a claim for 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 might not even be employed when they were injured, but because of their injury, other work opportunities have been taken away. Because of the many ways someone can suffer a loss of earning capacity, the law is somewhat flexible in presenting a claim for lost earning capacity. Still, lost earning capacity claims can be in challenging.

 

Self Employment

Self-employed folks face 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 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, call us at 1-888-306-6910. We have helped many people with lost income claims as part of their personal injury case.

Joe Di Bartolomeo
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Top-rated Personal Injury Lawyer Helping Oregon and Washington Families