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Calculating “Lost Earning Capacity”

Ellis & Thomas, PLLC Sept. 25, 2023

According to statistics from the Texas Department of Insurance, Division of Workers’ Compensation, private industry employers statewide reported 178,900 total nonfatal injuries and illnesses in 2021. Under Texas laws, accident victims are often eligible to pursue financial compensation for their injuries through an insurance claim or lawsuit. In addition, if you suffered a serious injury and you were able to work temporarily or permanently, you may be entitled to seek lost earning capacity, among other available damages. 

At Ellis & Thomas, PLLC, our attorneys are poised and ready to support and represent clients in their workers’ compensation and personal injury cases. Our skilled Texas personal injury attorneys can examine every aspect of your unique situation, estimate your case value, and seek to prove negligence and lost earning capacity. In addition, we will fight vigorously to protect your rights and help maximize your recovery. Our firm proudly serves clients across Houston, Montgomery County, Fort Bend County, Harris County, and Brazoria County, Texas. 

Loss of Income vs. Lost Earning Capacity 

Loss of income and lost earning capacity are among the available economic damages that a plaintiff may be able to recover after an injury or accident. Loss of income includes wages, salary, or unemployment benefits that an accident victim loses as a result of their work injury, hospitalization, or inability to work during their recovery period. The lost earnings are calculated reasonably from the date of injury to the date the person is able to return to work. 

Conversely, lost earning capacity can be described as the future income or wages that the injured person can’t earn as a result of their permanent or temporary injury. In most cases, such an injury may decrease the victim’s ability to perform their previous work or find new employment. For instance, if the plaintiff (a commercial truck driver) suffers a broken leg, they may be unable to work at their previous job with a long-term injury. Thus, they may be eligible to recover compensation for lost earning capacity. 

How Is Lost Earning Capacity Calculated? 

Generally, calculating lost earning capacity often involves a lot of complexities. The judge will consider the following factors to determine a fair amount: 

  • your profession 

  • your age and life expectancy 

  • your transferable job skills 

  • wage rates 

  • your location 

  • your work experience 

  • your talents and abilities 

  • promotion history 

  • your education 

  • your employment or work history 

  • your ability to move to a different employment 

  • market value and trends in your industry. 

If you were involved in an accident and want to know how to calculate lost earning capacity, you should reach out to experienced personal injury attorneys as soon as possible. Your legal counsel can determine your eligibility to recover lost earning capacity and help determine a reasonable amount. 

How to Prove Lost Earning Capacity 

Unlike lost income, proving lost earning capacity can be quite complicated. Your lawyer must collaborate with an experienced doctor to provide significant evidence and facts – such as medical reports and witness testimonies – which would show the extent of your injuries and the long-lasting effects on your ability to return to work and potential work performance. 

Additionally, your legal counsel can calculate and prove your estimated future earnings using the current wage rate and market values in your employment or industry. An experienced personal injury attorney can work diligently to show lost earning capacity and help you pursue fair financial compensation to cover your medical expenses, lost wages, pain and suffering, and other available damages. 

Why You Should Work With an Attorney 

As mentioned earlier, getting experienced representation when filing your injury claims and seeking lost earning capacity is crucial. The insurance provider will challenge the amount of the loss of earning capacity. Likewise, the insurer may try to deny or undervalue your claims. 

Your attorney will fight vigorously for your best interests, gather substantial evidence and documentation to prove the lost earning capacity, and help you recover the maximum available financial compensation for your injuries. 

Let Us Help Protect Your Finances and Best Interests 

A personal injury or auto accident can have both immediate and long-term effects on victims, depending on the severity of your injuries. Regardless, you’re not alone. At Ellis & Thomas, PLLC, we have devoted our careers to advocating for the best interests of personal injury victims and their loved ones. Our reliable legal team can guide you through the complicated procedures involved in filing claims and help you pursue lost earning capacity, among other possible damages. 

Contact us at Ellis & Thomas, PLLC, today to schedule a simple case evaluation with reliable personal injury lawyers. Our dedicated attorneys can fight for you and help you seek your rightful financial compensation. We’re proud to serve clients across Houston, Montgomery County, Fort Bend County, Harris County, and Brazoria County, Texas.