Calculating lost earning potential for personal injury lawsuits

On Behalf of | Dec 19, 2023 | Personal Injury

A personal injury lawsuit may be filed for many different reasons. Sometimes, it is a car crash that triggers the lawsuit. Other times, it might be a defective product or a dangerous property that prompts litigation. A plaintiff asking the courts for financial compensation related to an injury typically needs to request a specific amount from the defendant. People may seek reimbursement for medical expenses and property damage losses. They could also potentially request compensation for lost income and lost earning potential.

Lost income can be easy to calculate, as it involves reporting how many days of work someone missed while recovering from their injuries. Lost earning potential can be a bit harder to effectively value. How can a personal injury plaintiff realistically establish the value of their lost earning potential?

Look at the big picture

The most common mistake people make when trying to calculate lost earning potential is to fixate too much on their current income. Most professionals will slowly but steadily increase their wages throughout their careers.

Even if someone is not particularly ambitious, companies occasionally offer cost-of-living raises to workers to ensure that their pay accounts for inflation and at least remains steady. However, plenty of professionals will seek promotions as they develop their careers, take on special projects to earn extra income or negotiate with their employers for substantial pay raises based on their performance.

If someone misses a lot of work due to medical issues, that could slow down the progress of their career development or make them ineligible for future advancement opportunities. In some cases, they may need to cease working altogether. They would need to base their compensation claim on how much their career may have developed and what that would have meant for their income. They also need to think about compensation for lost benefits.

Those who have competitive compensation packages from their employers often receive paid time off and different types of insurance as employment benefits. Those benefits drastically increase the overall value of someone’s employment, potentially adding as much as 30% to the overall financial impact of their job.

It is quite difficult for the average person to accurately review all of those details and come up with a reasonable figure. Many people pursuing a personal injury lawsuit bring in professional help specifically to assist them with setting a reasonable value on their lost earning potential. The support of someone who is familiar with the law and who is able to calmly and rationally advocate in civil court is also very valuable.

Establishing the true financial impact of an injury that affects someone’s career is crucial when pursuing compensation. Seeking legal guidance is a good place to start.