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Loss of Earnings in Personal Injury Litigation

Loss of Earnings and Earning Capacity

Any other significant losses or damages must be proven through the testimony of other expert witnesses or in some other legally acceptable way. For example, if you can no longer perform your job because of your injuries, an economist and a vocational expert may have to testify. This testimony will review the types of work available and appropriate for you and the actual economic losses you will suffer because you can no longer do your job.

Have you ever wondered, after hearing about a multi-million-dollar jury verdict in a personal injury case, about the fairness of the jury that returned that verdict? Have you questioned whether any injury could be so severe as to justify such a verdict? The reasoning behind large jury verdicts often can be found in loss of future earning capacity. Compensation for pain and suffering represents only one of several elements a jury must consider when deciding upon a total monetary award in a personal injury case. If the accident victim has suffered lost earning capacity, these economic damages may far exceed compensation for the pain and suffering. Economic damages may include not only lost earnings, but also lost retirement benefits, profit sharing, health care coverage, and other benefits lost due to the inability to work.

You may be able to continue to work, but only at a reduced level of efficiency. This may result in a slower rate of growth in earnings and benefits over the course of your career. These losses can easily be measured and proven at the jury trial through the testimony of an economist. When projected over an entire career, they can become very large.

The accident victim who is not employed outside of the home can also expect compensation if that person’s ability to render his or her usual household services is reduced by the injury. The value of household services depends on the age, gender, and employment status of the person. An economist can be expected to testify that the loss of household services for a retired male is $9,000 per year. This is supported by the study out of Cornell University by Drs. Gauger and Walker entitled, The Dollar Value of Household Work. This is an authoritative study relied upon by economists. There are other studies that are more liberal and may support even higher numbers. For example, Drs. Martin and Vavoulis in 2002 authored a study entitled Determining Economic Damages. These two studies will give you a good idea of the value of your household losses.

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