If you were hurt in a car accident, your attorney probably has asked about your injuries to find out what the case is worth. For example, they may inquire about your medical bills, pain, and mental distress you suffer.

Other vital questions to answer in a personal injury case are what you do for a living and how much you earn. These are critical questions that could influence the size of your settlement. In addition, your monthly wages are vital to show your loss of earning capacity since the accident, which will affect your future earnings.

What Is Lost Earning Capacity?

Earning capacity is how much money you can make in the future. It doesn’t mean what you make today or earned in the past. So, loss of earning capacity means your inability to earn the wages you should have earned before the accident.

Let’s say you’re a dentist in Katy, a pleasant suburb outside of Houston, Texas. A drunk driver slammed into your SUV at a red light. The severe crash broke your right hand and fingers in several places. Because of the accident, you can no longer use dental instruments critical to your work.

Modern medicine is fantastic, but some hand injuries prevent surgeons and dentists from ever working again in their field. So, you need to work as a dental consultant, but you can only earn about half of what you did before.

Had the drunk driver not caused the accident, you probably could have been a dentist for another 20 or 30 years. You make a good living as a dental consultant, but you will probably make a lot less in your career now.

Loss of earning capacity means the difference between what you would have earned and what you will probably make now after the accident. For example, if another driver caused the accident, your attorney would claim lost earning capacity in your personal injury case.

Loss of Earning Capacity vs. Lost Wages

It’s a common misnomer to equate the loss of earning capacity with lost wages. They’re different concepts.

Lost wages mean the amount of money you couldn’t make because you were hurt. For example, if you broke your foot in a car accident caused by someone else, you may not be able to do your job as a delivery driver for months. So, the car accident made you miss those earnings.

Determining lost wages is relatively easy. You simply multiply your hourly or daily wage by the hours you would have worked. However, coming up with lost earning capacity is more complicated and requires the skill and experience of an attorney.

Why Loss of Earning Capacity Can Be Difficult to Prove

Proving loss of earning capacity can be more complicated than determining lost wages. However, the wages you didn’t earn when you were injured can sometimes be easily calculated.

On the other hand, lost earnings in the future are something you didn’t earn yet. However, this part of your claim or lawsuit can add up to a sizable sum. So, it is vital to carefully work with your attorney to calculate your loss of earning capacity.

How Is Loss of Earning Capacity Calculated?

It’s not simple to calculate the loss of earning capacity, but your attorney will go over several factors to arrive at a fair number including:

  • Your job
  • Your city and state
  • How much education you have
  • How many years of work experience
  • Job skills
  • Industry employment trends
  • Current market values and your wage rates
  • Your history of receiving raises, promotions, and skill improvements
  • How easy it is for you to transfer to a related or different job

Your lawyer will use their skill and experience, combined with that of their economic experts, to produce an estimate of how much earnings you’ll lose for the rest of your life.

Your attorney may bring in a vocational expert to testify about your inability to do the work. For example, you used to have a job as a copy editor where you sat all day. But the injuries are so bad you can’t sit for more than 15 minutes at a time.

Your attorney and their experts may also argue that your back injuries prevent you from doing similar work. This inability to work would affect your long-term earning potential.

Give your attorney as many details as possible about your work, job history, and skills. That way, they can perform an accurate loss of earnings capacity calculation.

Involved In An Accident? Contact Johnson Garcia Law Today

If you were injured in an accident in Texas, you could be entitled to compensation if another party was at fault. Our attorneys can determine your eligibility for compensation, including the potential loss of future earning capacity. Contact Johnson Garcia today for a complimentary consultation.