Although Massachusetts does not allow personal injury plaintiffs to recover for lost wages directly – in other words, you cannot recover for the wages or salary you lost while recovering from your injuries in the hospital – you can recover for what is referred to as lost earning capacity under Massachusetts law. Lost earning capacity is a decrease in your ability to earn wages or salary caused by the defendant’s negligence. When personal injuries are serious, lost earning capacity damages can be substantial.
For example, if you are a professional quarterback and the defendant negligently paralyzes your throwing hand, you’ve basically lost all of your ability to earn money as a professional quarterback. You are entitled to recover fair and just money damages for that loss. You do not need to have been gainfully employed at the time of your injury to recover for lost earning capacity – you just need to have had your ability to earn money damaged by the defendant’s negligence.
To recover for lost earning capacity, you’ll need to show enough evidence to allow the jury or judge to make a rational estimation of: 1) the extent or impairment of your earning capacity, and 2) the fair value of that impairment. In other words, you have to show the difference between your earning abilities before and after the accident, and what that difference is worth. The question focuses on your earning ability, not the earning ability of someone in a similar line of employment. For example, let’s say our professional quarterback was as skilled as Tom Brady. Contrast that quarterback with a little known back-up. Obviously, the Tom Brady caliber quarterback’s loss of a throwing arm causes damages that are quite a bit more – perhaps hundreds of millions of dollars more – than the damages caused by a similar injury to a back-up quarterback. Note that an employer’s willingness to hire you back after your recovery might decrease the fair value of your money damages, but it won’t bar you from recovering.
Future lost earning capacity is also something you can recover for, and the calculation of these losses can include a condition or injury that further decreases your earning abilities over time. In addition, because money now is worth more than money later – for example, many, if not most, people would gladly take $30,000 now rather than wait 25 years for $35,000 – the jury will also have to decrease your future lost earning capacity damages to their present value. Even so, if your lost earning capacity is substantial and you expect it to last well into the future, your damages can number in the millions of dollars, depending on the facts and circumstances of your particular case.
Lost earning capacity damages are calculated with respect to your earning capacity at the time of the injury. This means that if you made $20 per hour at the time of the accident, but expected your wages to increase to $50 per hour in thirty years, your lost earning capacity damages wouldn’t consider your future expectations because, frankly, it is impossible for the jury to know how much you’ll be making in the future. Instead, the jury takes the $20 amount you were earning at the time of the accident into consideration and decides how much of that $20 per hour you are now unable to earn due to your injuries.
Unemployed personal injury plaintiffs can run into complications when trying to prove lost earning capacity. We said before that you don’t have to be employed to recover for lost earning capacity, and that’s true; but finding the relevant benchmark for determining your lost earning capacity can be fairly complicated if you were not employed at the time of the injury. What if you were unemployed for the three years before your personal injury accident, did nothing but outdoor rock climbing in the meantime, and suffered several unrelated serious injuries while climbing that impaired your earning capacity? The jury can often use the last wage you earned as their benchmark, but they will be instructed to decrease that amount by the lost earning capacity resulting from your climbing injuries – that way, the negligent defendant doesn’t pay for earning capacity he or she did not cause you to lose.
Self employed individuals also face a more difficult test when it comes to showing the amount of lost earning capacity. Can a restaurant owner who also acts as general manager recover for any revenues the restaurant failed to bring in while the restaurant owner was recovering from negligently-caused personal injuries? The answer is almost certainly not, and that’s because the owner’s managerial skills and abilities are not the essential and dominant factor behind the restaurant’s earnings. Restaurants earn money due to many factors, including marketing, cooks, wait service and menu selection. It therefore isn’t clear that the restaurant would be unable to run without the manager, and estimating what portion of the lost revenues resulted from the owner’s absence is probably mere speculation. For all the jury knows, those losses could just as easily have been caused by economic recession or poor cooking, not the owner’s absence.
On the other hand, a physician who runs a small private medical practice will likely be able to recover for revenues lost while recovering from personal injuries arising from another person’s negligence because the physician is the essential and dominant factor behind the private practice’s revenues, without whom the private practice makes no revenue. Unlike the restaurant owner’s losses, the physician’s losses are pretty clearly attributable to the loss or impairment of the physician’s personal skills.
