Personal injuries can be caused by careless drivers, negligent doctors, poorly designed products, hazardous property conditions, and other breaches of the duty to avoid causing harm. Many personal injuries heal completely. Many others have lingering residual effects but allow the injury victim to continue working. When personal injury victims miss work during the healing period, they can make a claim for their lost wages in addition to their other damages.
Seriously disabling injuries, on the other hand, often impair the injury victim’s ability to continue working in a former position. Catastrophic injuries may prevent the victim from performing any income-producing work at all. In those cases, victims are entitled to recover not just their past wage loss but also their loss of future wages. In many cases, a future wage loss is expressed as a loss of earning capacity.
Vocational evaluations help personal injury lawyers and insurance defense attorneys evaluate claims for loss of earning capacity. To understand the critical role that vocational experts play in performing vocational evaluations, it is important to understand the concept of lost earning capacity.
Loss of Future Earnings vs. Loss of Earning Capacity
“Loss of future earnings” refers to the specific amount of money that an injury victim would have earned from work performed in the future if the injury had not occurred. Most jurisdictions require loss of future earnings to be proved to a reasonable certainty.
In limited cases, lawyers will be able to develop evidence to meet that burden. An injury victim who planned on retiring at the end of an employment contract can calculate lost compensation based on contractual rights. If the victim sustained a catastrophic injury after finishing two years of a five-year employment contract, the victim’s lost earnings are the salary, guaranteed bonuses, and benefits promised in the last three years of the contract. A plaintiff may also be able to prove the loss of discretionary bonuses to a reasonable certainty if, for example, the employee has a track record of receiving those bonuses and no economic circumstances suggest that the employee would receive a lower bonus in upcoming years.
In most cases, proving loss of future earnings to a reasonable certainty is more challenging. It is nearly impossible to predict the career paths of younger workers. A 25-year-old employee might become an executive vice president by age 45 or might be fired at age 30. Nobody can predict the future.
Recognizing that reality, most jurisdictions allow personal injury damages to be based on lost earning capacity rather than loss of future earnings. A loss of earning capacity is based on the lost potential to earn income in the future rather than the actual loss of future income. For example, it is virtually impossible to predict with any certainty the income a minor might earn after graduating from high school. The loss of the potential to earn future income is much easier to establish.
An injury that impairs the ability to do broad categories of work diminishes the plaintiff’s ability to earn income. Even if the plaintiff has no earnings history, the plaintiff can recover compensation for the diminished potential to earn future income.
Lost future earnings must be proved to a reasonable certainty because courts characterize those losses as special damages. That is, they are losses that have a measurable value. Most courts characterize the loss of earning capacity as general damages because they cannot be measured with precision but can be inferred from the nature of the injury. General damages generally do not need to be proved to a reasonable certainty. Juries can usually award any reasonable amount as general damages if the award finds some support in the evidence.
How Vocational Experts Help Lawyers Prove Loss of Earning Capacity
Lost earning capacity claims are based on the loss of potential earnings. When an injury victim has a work history, vocational experts examine the victim’s employment prior to the injury. They determine the physical and mental abilities required to perform that work.
Vocational experts then examine medical records, including functional capacity evaluations, to determine the limitations that resulted from the injury. Vocational experts compare those limitations to the requirements of the victim’s former jobs to determine whether the victim is still capable of performing them.
If the victim cannot return to his or her most recent job, the vocational expert determines whether the victim can perform jobs that the victim held in the past. The expert also examines other jobs that are consistent with the victim’s work limitations to create a realistic range of jobs the victim would be able to perform. Those tasks are part of a vocational assessment that defines the injury victim’s ability to work.
Using databases and the expert’s own research, the vocational expert determines whether such jobs are available in the victim’s community. The expert then compares the wages paid by those jobs to the wages the employee was earning to determine whether the victim’s earning capacity has diminished.
Vocational Evaluations Help Lawyers Prove or Contest Claims of Lost Earning Capacity
A complete vocational evaluation goes beyond work history. A vocational expert examines a variety of factors that determine employability, including educational background, military background, job training, skills, aptitudes, interests, and personality. The vocational expert will determine whether the victim’s skills are transferable to different employment that the victim has the functional ability to perform. The expert also determines whether the victim has the ability to be retrained.
The information that contributes to a vocational evaluation comes from a variety of sources, including interviews with the injury victim and the victim’s family and friends. The expert reviews educational, military, and employment records, as well as any psychological evaluations that were performed before and after the injury. The expert may administer tests that will help the expert determine the victim’s vocational strengths and limitations.
Vocational experts who work with insurance defense attorneys may not have access to the victim, but they can help attorneys understand the documents that should be obtained in discovery to complete a vocational evaluation. Whether they work for the plaintiff or defendant, vocational experts prepare a complete analysis of future earning capacity that includes the results of a vocational evaluation.