Case Study: B.C. Court Reverses Award for Loss of Earning Capacity

Case Study: B.C. Court Reverses Award for Loss of Earning Capacity

When you are injured in a motor vehicle accident, your first thoughts go to seeking medical treatment. But shortly thereafter, you may realize that your injuries are serious enough to keep you from working. If that is the case, you are entitled to compensation for such losses.

There are actually two distinct types of damages here. The first is for your loss of income. This is typically easy to determine. Let us say you are employed at the time of the accident and take home $600 per week in wages. If the accident causes you to miss two weeks of work, your damages for lost income equals $1,200.

Now consider the potential impact an accident has on your ability to earn money in the future. In legal terms, we call this “loss of earning capacity.” It represents the difference between what you are able to earn after the accident versus what you could have made if you were never injured in the first place.

Obviously, this is much more difficult to prove than loss of income, as it implies a certain degree of speculation. To keep such damage awards rooted in the evidence, B.C. courts have consistently held that proving lost earning capacity requires evidence of a “real and substantial possibility” that the plaintiff suffered such a loss.

Gao v. Dietrich: What Evidence is Required When Proving Lost Earning Capacity

A recent decision by the B.C. Court of Appeal, Gao v. Dietrich, illustrates how courts look at evidence proving lost earning capacity. In this case, the appellate judges disagreed with the trial court’s findings on this subject. The trial judge believed the plaintiff proved her claim for such damages, but the Court of Appeal reversed.

Here is what happened: The plaintiff and the defendant were involved in a 2013 motor vehicle accident that took place in Richmond. The parties’ vehicles collided in an intersection. The defendant conceded he was responsible for the accident.

The case was therefore tried in B.C. Supreme Court on the issue of damages alone. Before the trial court, the plaintiff presented evidence of the extensive physical and psychological injuries she sustained in the accident.

Prior to the accident, the plaintiff–then in her late 20s–worked for a major Canadian bank as a senior financial sales representative. In that position, she earned a base salary of $43,400. As of early 2013, the plaintiff ranked in the top 5% of bank employees at her position.

Unfortunately, after the accident the plaintiff testified she “began to struggle at work and her performance level declined.” Due to increasing interpersonal conflicts with co-workers and customers, the plaintiff transferred to a different job–mortgage underwriter–within the bank. This represented a significant departure from the plaintiff’s pre-accident plan to become a financial advisor.

The Trial Court’s Award and the Defendant’s Challenge

At trial, the judge awarded the plaintiff $100,000 in damages for her loss of earning capacity. The judge noted that as a result of her accident-related injuries, the plaintiff had “lost confidence in her ability to become a Financial Advisor.”

But for the accident, the judge said, the plaintiff likely would have stayed in her pre-accident sales representative position and ultimately became a financial advisor, instead of switching to the less-demanding role of mortgage underwriter.

On appeal, the defendant challenged the plaintiff’s evidence purportedly proving lost earning capacity, arguing the $100,000 award was inappropriate for several reasons:

  • The plaintiff lacked the qualifications to become a financial advisor at the time of the accident.
  • There was no evidence such a position was actually available up to the date of the trial.
  • There was no evidence that the plaintiff would have actually earned more money as a financial advisor than as a senior sales representative.

Finally, according to the defendant, the totality of the evidence simply failed to establish any “real and substantial possibility that [the plaintiff] suffered an income loss but for the accident.”

The Court of Appeal: Proving Lost Earning Capacity Requires More Evidence Than Plaintiff Provided

The Court of Appeal addressed the defendant’s four main points as follows:

  • There was “some evidence” that the plaintiff was qualified to be a financial advisor–namely, her own testimony. But that was the only evidence introduced at trial.
  • There was no evidence the plaintiff’s bank advertised an opening for a financial advisor between the date of the accident and the date of trial. However, the plaintiff and her supervisor both testified it was possible for employees to seek promotion to the job of financial advisor. But this did not mean such a promotion was “probable,” as the trial judge concluded.
  • Similarly, the only evidence the plaintiff would have earned more as a financial advisor than as a sales representative came from her own testimony and that of her supervisor, which was “anecdotal” at best. The Court of Appeal noted there was no expert evidence introduced on this point.

Taken as a whole, the Court of Appeal said the evidence “did not rise to the necessary threshold of a real and substantial possibility of past income loss.” Accordingly, the court reversed the trial judge’s entire award for loss of earning capacity.

Separately, the Court of Appeal also reversed the trial judge’s award of $1,300 in damages to the plaintiff for her to attend a weight-loss clinic. This falls under the classification of damages for “cost of future care.” Under B.C. law, such awards must be based on what is proven to be “reasonably necessary, on medical evidence, to promote the mental and physical health” of the plaintiff.

Here, one of the plaintiff’s healthcare providers advised her she needed to lose weight. But there was no specific recommendation for her to go to weight-loss clinic. Therefore, the Court of Appeal concluded it was not medically necessary.

Contact the Preszler Law Firm Today if You Have Been Injured in a B.C. Car Accident

Proving lost earning capacity or other damages is often more complicated than establishing the negligent driver’s liability in B.C. auto accident cases. That is why you need to work with a qualified Richmond car accident lawyer to assist you in building the strongest possible case for damages. Contact the Preszler Law Firm today to schedule a free consultation with a member of our legal team to discuss your case.



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