Determining Loss of Earnings Claims During a Despondent Economy

October 2014

Determining Loss of Earnings Claims During a Despondent Economy

Written by: Nathan B. Lee
Published by: Claims Journal 

A majority of us have or will witness accounts of a plaintiff claiming personal injury. He or she may claim multiple reasons for the injury along with millions of dollars in damages.

The difficulty truly sets in when one needs to evaluate claims for loss of earnings, specifically during this recovering economy. Many factors come into play in personal injury situations, including unemployment, underemployment and immigration status. Oftentimes, insurance companies struggle to evaluate the loss of earnings claims due to these circumstances. That being said, it is imperative that each claim is thoroughly analyzed and litigated from the beginning.


How to Determine a Loss of Earnings Claim

In situations where persons have been severely injured, individuals are often rendered unable to work. According to California laws, those who have been injured are entitled to claim loss of income. Although claiming a loss of income is beneficial, providing proof becomes a tedious task as specific documentation is required. If the appropriate documentation is not presented, it is unlikely the insurance company will consider the loss of earnings claim. Furthermore, a jury will not include loss of earnings damages in a verdict. Confirmation from a doctor must be presented in order to receive disability from work. Once this has occurred, it is mandatory for the injured party to evaluate the value of their time. However, this can become problematic in California for the self-employed, unemployed and underemployed.

Steps to Gauge Future Loss of Earnings

When the time comes to evaluate a person’s future loss of earnings, evaluation is not determined by actual earnings, whether prior to or succeeding to the injury. The person’s lost ability to earn money is the main focus when damages are calculated.

For a plaintiff to gain entitlement to recover present damages for future consequences, evidence must be presented that there is indeed a high probability leading to a reasonable certainty that future lost earnings will result from the original affliction.

Situations involving sizable claims for future lost earnings are determined by the party’s education and employment history, which brings much debate. To determine the amount of future earnings, parties generally rely on economists and vocational rehabilitation experts. Before moving forward with this process, certain standards must be met by the plaintiff to prove their upcoming lost earnings.

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Test your knowledge on this topic in our So You Think You Know The Law Q&A found in the right column.

Gray·Duffy Welcomes

Timothy Thornton as Partner

Gray·Duffy, LLP announced that Timothy M. Thornton, Jr. has joined the firm’s Encino office as a Partner.  Mr. Thornton has more than 25 years’ experience providing legal counsel for insurance-related matters, including mass torts, toxic torts and exposures, environmental contamination, insurance coverage of intellectual property and entertainment matters, as well as sexual abuse as it relates to religious entities.

Mr. Thornton is a member of the California State Bar, the Los Angeles County Bar Association, American Bar Association, Association of Southern California Defense Counsel, and the Defense Research Institute. 

David Fisher to Participate at California Pawnbrokers Association Annual Convention

Partner David Fisher will participate in a roundtable discussion at the California Pawnbrokers Association’s 58th Annual Convention and Exposition in Pomona on Sunday, October 26. Mr. Fisher, along with other industry leaders, will discuss current issues affecting pawnbrokers and secondhand dealers. California Pawnbrokers Association serves its members through legislative advocacy, professional education, industry programs and legal resources.

So You Think You Know The Law?

True or False?

In a personal injury lawsuit, a plaintiff must provide their work history to be able to recover damages for lost earning capacity. 

True or False?

In a personal injury lawsuit to recover future lost earnings, a plaintiff must prove the amount of earnings he or she will be reasonably certain to lose in the future as a result of the injury.  

True or False?

California law states that when an illegal alien or undocumented worker has not taken the proper actions to legalize his or her status and is likely to continue residency in the United States without documentation, a court may award damages based on the individual’s earning potential in California.

Real Estate Corner

Adjoining Owners Equally Responsible for Shared Fences and Boundaries


Adjoining landowners, with properties contiguous or in contact with each another, must share equally the responsibility for maintaining boundaries and monuments between them. Adjoining landowners are presumed to share an equal benefit from any fence dividing their properties and, unless otherwise agreed in writing, are presumed to be equally responsible for the reasonable costs of construction, maintenance or necessary replacement of the fence. A landowner must give each affected adjoining landowner a 30-day prior written notice of any intent to incur costs for a division fence. 

Please Note: This article is necessarily general in nature and is not a substitute for legal advice with respect to any particular case. Readers should consult with an attorney before taking any action affecting their interests.