Personal injury victims often survive with permanent disabilities that limit or eliminate their employment prospects. Some people have to end personally rewarding and well-paying careers; others must give up any hope of ever working again.
Helping such individuals secure insurance settlements or civil trial awards that compensate them for their loss of earning capacity is one of the things I most enjoy about serving as a personal injury attorney in Virginia Beach. Of course, I also have to explain to my clients what this means.
A handy definition of earning capacity comes from a ruling in a California case:
An estimate of earning capacity is a prediction of what an employee’s earnings would have been had he not been injured. In making a permanent award, long-term earning history is a reliable guide in predicting earning capacity, although in a variety of fact situations earning history alone may be misleading. All facts relevant and helpful to making the estimate must be considered. The applicant’s ability to work, his age and health, his willingness and opportunities to work, his skill and education, the general condition of the labor market, and employment opportunities for persons similarly situated are all relevant.
Defined this way, earning capacity can be distinguished from lifetime earnings, which, as a practical matter, can only be calculated once a baseline for earning capacity is established. Without getting too technical, it is essential to show that a personal injury victim could earn some money over a certain number of years of employment before producing an actually dollar value for those projected earnings.
A vocational expert determines a person’s earning capacity. An economist calculates lifetime earnings.
So what does a vocational expert do? According to the Social Security Administration, a “VE” provides “impartial expert opinion evidence about a claimant’s vocational abilities.” The federal agency, which relies heavily on the findings of VEs when deciding whether to award long-term disability benefits, further clarifies that “an ideal VE will have up-to-date knowledge of, and experience with, industrial and occupational trends and local labor market conditions.”
A VE takes all of the following into consideration when determining whether a person with a physical or intellectual disability possesses the capacity to continue doing the work he or she did before getting injured:
- The skill level and physical and mental demands of the former occupations
- The characteristics of the work setting
- The existence and incidence of jobs within the previous occupational category
- Transferable skills (i.e., knowledge and abilities that suit the person for a different job).
In my own practice, I often work with vocational experts when representing clients who suffered career-ending injuries while working for a railroad, brain injuries from car crashes, amputations and wrongful deaths from any cause. In the last type of cases, a deceased individual’s surviving spouse and dependent children have the right to claim damages for the earnings their loved one would have contributed to the family.
Disabling conditions often require lifelong care. Securing compensation for lost earning capacity and lost lifetime earnings, therefore, can be essential for enabling a personal injury victim to live his or her best life.