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How to Value the Loss of Earning Capacity Claim

New Orleans, LA Loss of Earning Capacity Lawyer

Loss of earning capacity web

Loss of earning capacity – or diminished earning capacity – is serious, and common among personal injury claims. Those suffering from serious or catastrophic injuries are often affected by their injuries for the rest of their lives. Because of those injuries, they may be unable to return to work full-time or at all. One of the most common questions faced by personal injury attorneys and judges is what evidence is required to support a claim of loss of earning capacity, and how is it valued by the courts?

The Purpose

The concept behind a diminished earning capacity claim is that every individual has an inherent ability to earn a living. When that person is seriously injured and suffers a loss of physical or mental abilities, there is also a corresponding decrease in his or her earning capabilities. That, in essence, is the claim of loss of earning capacity.

Requirement to Prove the Substantial Possibility of Reduced Future Income

In order to qualify for a loss of earning capacity claim, the claimant must first prove that there is a legitimate possibility that his or her future income will be less or non-existent due to their injuries. In order to prove this, the plaintiff must:

  • Show proof of wages and income, prior to the injury. This can be done by providing tax returns, pay stubs, W-2s, 1099s, business profit and loss statements, or statements from employers.
  • Show medical evidence (through medical history and treatment reports, as well as expert testimony) that the current injuries will reduce his or her earning capacity, or eliminate the ability to earn a living in the future.

Loss of Income is Not Loss of Earning Capacity

A loss of income refers to wages or benefits that were lost, due to the injury. For example, if the plaintiff was severely injured and unable to work for six months due to that injury, this is considered a loss of income. In most personal injury claims, a victim can recover lost income from his or her injuries in monetary damages. Income does not need to be lost all at once to make a claim for loss of income. If the claimant will be out of work during the course of his or her case and a small amount of time afterwards, the victim can still collect for lost income in the future, as well.

A loss of earning capacity refers to a decrease in the person’s ability to earn an income. This is often referred to as an impairment of earning power, as well.

Quantifying Loss of Earning Capacity

In order to qualify for a loss of earning capacity, there is a complex calculation that must be performed to arrive at a settlement value. A few things that will be considered include:

  • Reviewing the plaintiff’s work profile and earning history
  • Reviewing the plaintiff’s talents, skills, education, and abilities
  • Hiring a medical expert to determine the extent of the injury
  • Using current market values and wage rates to determine how much the plaintiff would earn today, as well as in the future

Will You be Permanently Out of Work Due to a Catastrophic Injury? Contact an Attorney

If you have been seriously injured, it is imperative that you speak with a personal injury attorney. An attorney can help prove your claim for loss of earning capacity, and evaluate your case so that you are fully compensated for your permanent injuries. To get started, schedule a free case evaluation with the attorneys at Herman Herman & Katz, LLC by calling 844-285-0267 or filling out our online contact form with your legal questions.



Herman Herman & Katz, LLC
820 O Keefe Ave
New Orleans, LA 70113
Phone: (504) 581-4892

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