How Does an Auto Accident Affect a Self-Employed Person’s Income?

How Does an Auto Accident Affect a Self-Employed Person’s Income?

If you are self-employed, an auto accident can have a devastating impact on your ability to earn a living. Especially if you work in an industry where client demand tends to fluctuate, it may be difficult to calculate the precise loss of income attributable to an accident. Nevertheless, B.C. judges have a legal duty to make a “fair and reasonable” award of damages for loss of both past and future income based on the available facts.

Mills v. Graham: Massage Therapist Seeks Damages Following Rear-End Accident on Vancouver Island

A recent judgment from the B.C. Supreme Court, Mills v. Graham, offers some insight into how judges address these issues. The plaintiff in this case was injured in a November 2014 auto accident while driving to work in Nanaimo on the east coast of Vancouver Island. The plaintiff said she had slowed down to avoid hitting a deer that was crossing the road. As the deer crossed, however, the plaintiff was rear-ended by the defendant.

The plaintiff developed significant neck and shoulder pain as a result of the accident. This in turn affected her work as a self-employed massage therapist. The plaintiff is currently in her late 50s and has worked in massage therapy at various times since the 1980s. Since 2010, the plaintiff has operated a massage business out of her home. Prior to the accident, the plaintiff testified that she “was not seeing more than 11 or 12 clients a week” with “any regularity.”

The Plaintiff’s Loss of Past Income Due to the Accident

The plaintiff subsequently filed a personal injury lawsuit against the driver who rear-ended her. The defendant admitted liability for the accident. A trial was then held in February 2019 before Justice B.D. Mackenzie of B.C. Supreme Court solely to determine the extent of the plaintiff’s damages.

A key point of contention between the parties was the impact of the accident on the plaintiff’s massage therapy business. At trial, the plaintiff argued that she had planned to increase the number of clients she saw from 11 or 12 per week to between 14 and 16 per week. Yet the defence said the plaintiff failed to present any evidence of steps she actually took pre-accident to increase her business, despite the fact there was sufficient demand in the marketplace for massage therapists. Based on this, the defence argued there was never a “real and substantial possibility” that the plaintiff would have seen more than 11 clients per week, regardless of whether the accident happened.

Justice Mackenzie agreed with the defence on this point. Nevertheless, he also noted that the evidence showed the plaintiff averaged fewer than 11 clients per week in the nearly five years between the accident and trial. On that basis, he awarded the plaintiff $50,000 in damages for her loss of past income as a massage therapist, and an additional $5,000 in damages for loss of past income as a yoga instructor.

The Plaintiff’s Projected Loss of Future Income

Justice Mackenzie then turned to the question of the plaintiff’s “future loss of earning capacity,” i.e., her projected loss of business from the date of the trial (February 2019) until her expected retirement at the age of 70. As with past losses, the court’s rule here is to determine the “real and substantial” possibility of income loss and not merely speculate as to what the plaintiff might be able to earn.

As of the date of trial, Justice Mackenzie noted the plaintiff was back to working at her pre-accident average of 12 massage clients per week. Once again, the plaintiff maintained she would be able to see more clients–between 14 and 16 per week–if not for her accident-related injuries. The defence, again, argued that was pure “speculation.”

Justice Mackenzie ultimately determined there was “some” future loss of earning capacity, even if it was not as great as the plaintiff claimed. The judge said a “fair assessment” would be to project the loss of one massage client per week from the date of trial until the plaintiff’s retirement age. At the plaintiff’s normal rate for massage therapy services of $105 per hour, Justice Mackenzie said that worked out to $5,250 per year, or $51,345 over the course of the plaintiff’s expected working life. The judge also awarded the plaintiff an additional $12,323 based on the expectation that she will be “forced to reduce her home massages by one client per month.” This brought the plaintiff’s total damages for loss of future earning capacity to $63,668.

Quantifying the Plaintiff’s Pain and Suffering

As is common in personal injury cases, the court also awarded damages to compensate the plaintiff for her “pain and suffering.” At trial the plaintiff testified that her pain and suffering is particularly acute as it affects her ongoing work as a massage therapist. She told the Court that she is “burdened with chronic pain, functional limitations and the ever-looming fear of triggering intense flare-ups of pain and headaches.” The plaintiff therefore asked for a non-pecuniary damages award in the range of $85,000 to $100,000. The defence, in contrast, sought an award of between $40,000 and $68,000.

Justice Mackenzie largely split the difference and decided an award of $70,000 would “appropriately compensate” the plaintiff while remaining “fair and reasonable to both parties.” Together with the awards for loss of income and other types of permissible damages, the plaintiff’s total award came to just under $220,000, independent of any costs or pre-judgment interest.

Contact Preszler Law if You Need Help Seeking Compensation Following a B.C. Car Accident

There is often no scientifically precise way to measure an accident victim’s projected loss of future income or pain and suffering. It is therefore all the more important to work with an experienced Vancouver personal injury lawyer who can present as strong a case as possible to a judge regarding such injuries. Contact Preszler Law today if you have been injured in a B.C. auto accident and need immediate legal assistance. We offer a free no-obligation consultation, and we do not get paid unless we recover compensation on your behalf.




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