What is the law on loss of earning capacity?
British Columbia, Canada
The following excerpt is from Gordon v. Ahn, 2016 BCSC 795 (CanLII):
The law relating to the determination of damages for loss of earning capacity has been well described by Macauley J. in Hill v. Murray, 2014 BCSC 1528 at para. 245: There are two questions that the court must answer in addressing a claim for loss of earning capacity: (1) has the plaintiff’s earning capacity been impaired by his injuries, leading to a real possibility of pecuniary loss: and if so, (2) what compensation should be awarded for that loss? The court’s task is to assess the plaintiff’s damages, not calculate them with mathematical precision. The assessment requires a comparison between the plaintiff’s likely future working life if the accident had not occurred and his or her likely working life after the accident, “taking into account the positive and negative vegaries of life: Lines v. W & D Logging Co. Ltd., 2009 BCCA 10 at para. 57; Gregory v. Insurance Corp. of British Columbia, 2011 BCCA 144 at para. 32.
There are two possible methods for quantifying loss of earning capacity: the earnings approach and the capital asset approach: Perren v. Lalari, 2010 BCCA 140, at para. 32. Where the loss can be simply measured or quantified, the earnings approach is more suitable; where the loss is difficult to measure in a pecuniary way, the capital asset approach is more appropriate.
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