Calculating Loss of Earning Capacity in BC Personal Injury Claims

A personal injury claim can be filed when the injury is due to the fault of another party. Various factors come into play when determining the total amount of compensation. These might include future cost of care, compensation for pain and suffering, loss of income and special damages. In this article we will discuss what loss of earning capacity means and how the amount is calculates.

Proving Loss of Earning Capacity

Loss of earning is one of the most difficult areas to assess when calculating for damages (as opposed to special damages). The court is faced with the difficult task of assessing future possibilities while keeping the total amount within reasonable estimates. However, past cases have given an insight and guidelines on how the court determines loss of earning capacity in personal injury claims.

Proving “loss of earning capacity” deals with establishing that a person’s financial earnings would be negatively affected by the injury. They might not be as productive hence suffer a loss in earning capacity. This might include establishing the earning potential of a person if he did not suffer the personal injury. This is especially true for injured persons facing long term disabilities that prevent them from getting a job in the future. In the case of people who are not able to work at the same pace or working hours before the injury this would translate to loss in potential income.

In Perren vs Lallari 2010 BCCA 140, a woman was claiming a loss of earning capacity because she was not able to meet the physical demands of some jobs thus limiting her job options. However, it was later found that she was holding a managerial position before and after the injury. The court thus determined that her physical injury did not translate to loss in future earnings since her current position paid more compared to physically demanding jobs.

Our attorneys have helped many ICBC injury claimants receive loss of earning capacity settlements (in addition to other damages such as pain and suffering).  Contact us at

Calculating Loss of Earning Capacity

If the victim of personal injury is able to prove to the court that there indeed is a loss of earning capacity then the step is to determine the amount of damage this brings to the client. This is not a simple case of determining potential earnings because the claimant is unable to log the same working hours. Calculating loss of earning capacity includes assessing if the personal injury has prevented the person from pursuing future employment, his possibility for promotion and the possibility of being hired in more lucrative job positions.

Limiting factors in determining the total amount awarded for loss of earning capacity includes the person’s age of retirement, his potential as a candidate for future jobs among others. This is highly contentious and both parties might present factors to prove or disprove how much the injury could affect the client’s financial outlook.

If you think this is complicated then calculating the loss of earning capacity for babies and children can be more troublesome. All the difficulties of assessing loss or earning is magnified as the court is face with so many possibilities.

This is certainly far from being an exact science. This is why assessing loss of earning should be done by a qualified and experienced personal injury lawyer.

Please note that not all cases result in an award for loss of earning capacity.  Each case is assessed on a case-by-case basis, which is where we can help.
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