As a top Orange County personal injury attorney team, we understand that accident victims often face losses that aren’t immediately visible to others. Our compassionate team will work tirelessly to make sure you receive the compensation you deserve. Contact us online to get started

If you’re ever in a serious accident, your first priority should always be to address your physical injuries. However, your physical well-being isn’t the only thing you’ll need to deal with on the long road to full recovery. 

The fact of the matter is that some accident victims face losses that don’t meet the eye. In some cases, these losses are more devastating than their physical pain and affect their lives for years to come. One such loss is the inability to work in the same way they did before, known as loss of earning capacity

person counting their earnings

Here’s the bottom line: If you didn’t cause the accident, you shouldn’t be footing the bill for your losses—regardless of what those losses are. Luckily, an experienced personal injury lawyer may be able to secure the compensation you deserve through a settlement. In a thorough calculation, they can help you add every damage, including loss of earning capacity. 

If you lost your ability to work or are unable to work in the same way you did before your accident, you’re not alone. Keep reading to learn everything you need to know about loss of earning capacity, how to calculate it, and how a Costa Mesa accident lawyer can help protect your future. 

Need help now? At Case Barnett Law, we know that accidents can put a serious financial strain on your life. Contact us online to schedule a free consultation or give us a call at (949) 409-0055 to speak with one of our legal experts today. 

What Is Loss of Earning Capacity? 

In legal terms, a loss of earning capacity refers to a very specific type of damage. Rather than money already lost on medical bills, property damage, etc., loss of earning capacity deals with employment-based financial losses that will inevitably result from the accident. 

If an accident victim’s injuries render them unable or less able to work in the future, they may be awarded lost earning capacity damages in their settlement. However, the amount of lost earning capacity damages may be difficult to calculate. Typically, the court will take a number of factors into account, including past earnings, age, occupation, skill, and life expectancy. 

Lost Earning Capacity vs. Lost Wages

Although lost earning capacity and lost wages sound similar, they are two distinct types of damages. Whereas loss of earning capacity refers to future losses, lost wages refer to earnings that have already been lost as a result of the accident. 

Lost wages are a type of compensatory damages, and unlike general damages that may include intangible losses, they are only awarded if the plaintiff can present specific evidence. Fortunately, they’re not difficult to calculate; the plaintiff needs only to show the court what their rate of pay was prior to the accident and how much they would have earned. 

In some cases, the court will award these damages even if the injury victim was unemployed at the time of the accident. To receive these damages, they will need to prove that money would have been earned in the time period following their injury. 

How to Calculate Loss of Earning Capacity

After your Orange County personal injury lawyer has investigated your accident and compiled evidence, they will help you calculate your settlement demand. Make no mistake: Calculating a fair settlement is complex and requires expertise. A skilled attorney will likely take the following factors into consideration: 

  • Your job and position
  • The area in which you live
  • Your work history and performance
  • Your education level
  • Potentially transferable skills
  • Trends related to your industry

An experienced personal injury lawyer will thoroughly research these factors and more to ensure your settlement accurately reflects the damages you deserve. They may consult with experts in your industry to make sure they’ve accounted for everything. Your job will be to provide as many details as possible to your attorney to assist in their analysis. 

Loss of Earning Capacity FAQ

Understanding the nuances of damages—especially the differences between loss of earning capacity and lost wages—can be difficult. The best way to get clarity is by speaking with an Orange County personal injury attorney. In the meantime, check out the answers to some of our most frequently asked questions. 

• What is diminished earning capacity? 

Rather than referring to an inability to continue working, diminished earning capacity applies to situations in which someone experiences a decrease in income as a result of their injuries. Essentially, it means money lost due to a reduction in earning ability, even if the injury victim is able to work in some capacity. 

• Can a self-employed person claim loss of earning capacity? 

California courts recognize that self-employed injury victims can also experience a loss of earning capacity and allow them to pursue compensation accordingly. In order to receive these damages, a self-employed injury victim will need to provide records of past profits, as well as other pieces of related evidence. 

• What compensation does lost income include?

In terms of compensation for lost income, plaintiffs can include more than just wages in their settlement demands. They can also seek compensation for benefits, overtime pay, commissions, bonuses, other types of irregular income, sick days, vacation days, and leave days, as well as income from a business. 

Case Barnett Law: Orange County’s Premier Personal Injury Firm

Injury victims deserve justice. If you’ve been injured in an accident caused by someone else, you shouldn’t have to absorb the financial ramifications of the at-fault party’s negligence. Unfortunately, that’s the situation that many accident victims find themselves in when they fail to partner with an experienced attorney. 

Luckily, that doesn’t have to be you. 

Case C. Barnett
Costa Mesa Personal Injury Attorney practicing in child injury law, car accident injuries and elder abuse law