Calculating Post-Injury Earning Capacity
Case Summary: In 2018, a 55-year-old woman who worked as both a nursing aide and tutor was allegedly injured in a slip and fall incident. Plaintiff’s expert argued that because of the injury, Plaintiff would be totally and permanently precluded from all work. Defense counsel retained an economic expert to assess Plaintiff’s claim for lost wages and earning capacity.
Expert Analysis: The initial step was to review all documents provided in this case, specifically any provided by medical or vocational experts that opined whether Plaintiff was totally and permanently disabled from all work. Plaintiff’s economic expert assumed a total and permanent disability, disregarding medical experts’ opinion that Plaintiff can return to her pre-incident job as a tutor and therefore compensate for not working as a nursing aide.
To determine a reasonable pre-injury earnings baseline, Plaintiff’s tax returns for the two years preceding the incident were examined. Based on the limited earnings records provided, the average of her earnings from 2017 and her annualized 2018 earnings were used to calculate an earning capacity of $25,000 annually.
Next, Plaintiff’s post-incident earning capacity was evaluated. While she was unable to return to work as a nursing aide, medical experts opined Plaintiff could return to work as a full-time tutor. During her deposition, she testified she was earning more as a tutor than as a nursing aide. As a full-time tutor, she earned $24 per hour, or $49,920 annually, over $24,000 more than she had been earning pre-incident. Therefore, there would be no future loss of earnings. A past loss was calculated from the date of the incident to the date of the report of the medical expert who opined on her future ability to work.
Plaintiff’s expert’s assumption of a total and permanent disability was not based on any vocational or medical opinions, and even assumed she could never work in any capacity without reviewing all available relevant documentation.
Result: Expert report and analysis helped the parties resolve the case through settlement. When looking at losses in a case where the plaintiff’s expert assumes total and permanent disability, it is important to consider all available documentation and additional expert reports.
