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    Recovery for Loss of Income and Future Loss of Earnings in Auto Accidents

    The goal of a personal injury cause of action is to restore the victim to their original position if the accident had not taken place. In order to achieve this goal, a victim will be entitled to recovery not only for medical costs but loss of earnings due to the injuries sustained. More so a victim may also be entitled to compensation for future loss of income due to an ongoing injury or disability. Below you will find important information regarding loss of current income compensation and future loss of earnings recovery following an auto accident.

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    Past Loss of Earnings Compensation Due to a Car Accident Injury
    California courts have generally recognized the rights of victims to recover for loss of earnings while treating and recovering from injuries. This can also include lost compensation including bonuses, tips, sales fees, vacation days, and sick days.

    Loss of Future Earnings
    There are numerous factors which can play significant roles on determinig loss of future earning on behalf of injured victims. Some of the factors include the following:

    • Severity and extent of the disability resulting from the accident suffered.
    • Future earning potential based on your current occupation.
    • A calculation of pre-tax salary before the injury. California civil courts have established that all damages, including lost wages, arising out of a personal injury tort claims are in fact not taxable income.
    • Appreciating assets that a victim would have acquired based on the wages earned.
    • Dividends and positive cash flow based on the assets that would have been purchased.
    • The age of the person at the time of the injury – used to calculate the length of time a person would likely work.
    • Earnings growth rate for the industry and profession the victim was working in at the time of the injury.

    There are essentially two ways to present a future earnings loss claim at trial; But for Injury Gross-Earnings and Despite Injury Gross Earnings. A brief description of both will be presented below.

    • But for Injury Gross Earnings: The main emphasis of the but for gross injury gross earnings is to assess a victim’s established earnings path projections. Here vocational experts attempt to extrapolate an individual’s pre-injury earnings and project that for the future. Significant factors in this projections often include, general wage adjusted inflation, increases due to projected promotion, projected awards and bonuses that closely follow industry standards.
    • Despite Injury Gross Earnings: The analysis here is what will be the earning of the victim despite the injury or disability he has incurred. The pre-injury earnings of the victim is then reduced by that number.
    • Self-employed: Vocational experts must use certain variables including not only the salary of the business owner, but also the current value of the victim’s business, the projected value of the business based on growth rates of the past four to six years, profits of the business, and nominal wages and salaries paid to family members and loved ones.

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    Our law firm is dedicated to providing our clients with the maximum level of recovery for the damages they have suffered. This includes loss of income and future loss of earnings due to an injury or long term disability. If you have any legal questions regarding compensation for a loss of income or lost wages, feel free to contact our law offices. All legal consultations are provided by our attorneys free of charge.

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