Loss of Earnings Laws

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What is “Loss of Earnings” in a Personal Injury Lawsuit?

Loss of earnings in a personal injury lawsuit refers to the loss of monetary income due to the injuries inflicted by the defendant.  Defendants who are found liable for the plaintiff’s loss of earnings may be required to cover these in the damages award issued by the court.  This may include:

Generally speaking, the loss of earnings must be directly caused by the injury that is the focus of the personal injury lawsuit.  That is, loss of earnings may not be attributed to pre-existing medical conditions that weren’t caused by the defendant’s actions.  Also, the plaintiff needs to be able to prove the amount of lost earnings with reasonably certainty. 

Loss of earnings is sometimes called “lost wages”, “loss of income”, or “lost earnings”.  They are typically covered by the compensatory portion of the damages award rather than punitive damages.

Is Loss of Earnings the Same as “Future Loss of Earnings”?

No- loss of earnings only refers to past earnings that have already been lost due to the injury.  An example of this is where a person misses work because they were in the hospital for an accident.  If found liable, the defendant may have to reimburse the plaintiff for the lost wages missed while they were in the hospital.

In comparison, future loss of earnings is different in that it has to do with future wages that the victim hasn’t yet earned.  This involves calculations that are speculative, meaning that the court needs to estimate how much earnings the person will lose due to their injury.  Because of the difficulty in making such calculations, future loss of earnings is awarded less frequently than losses that have already occurred and are accounted for.

In addition, loss of earnings is even more different from the legal concept known as “lost earning capacity”.  Lost earning capacity involves damages awards for a reduction in the person’s rate of income in the future due to their injury.  For example, if an athlete is injured, they may file for lost earning capacity if the injury affects their ability to perform at competition levels. 

How is Loss of Earnings Calculated?

Loss of earnings is relatively easy to calculate.  Usually the plaintiff simply needs to present pay stubs from previous pay periods in order to establish their rate of pay.  They can also provide evidence that they missed work due to the injury.  This can be proven for instance using hospital records or other documents.  Or, they injured party may obtain witness testimony from their employer or co-workers, who can testify that the person missed work due to their injury.

Do I Need a Lawyer for Help With Loss of Earnings in a Personal Injury Lawsuit?

Loss of earnings is a very important aspect of many personal injury cases.  You may wish to seek the assistance of a personal injury lawyer if you need help filing for loss of earnings with the court.  Your attorney can provide you with guidance and can help you understand what your legal options are in terms of recovering for damages.  In addition, your lawyer can be on hand during court proceedings to provide you with representation for your case.

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Last Modified: 11-13-2012 02:49 PM PST

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