What is Diminished Earning Capacity?

Diminished earning capacity refers to a decrease in income as a result of an injury that affects your ability to continue doing your current job or robs you of career prospects for the future.

A person who sustains an injury might experience diminished earning capacity, for which he can collect compensation. You might have decreased earning capacity if you:

  • Must reduce your hours or work a lower-paying job because of your impairment
  • Cannot perform the same type of work that you used to do before the injury
  • No longer have the option to do certain types of work because of the injury

Injury That Diminishes the Ability to Earn Money

The injury must impact your ability to earn money for you to get compensation for decreased earning potential. In some cases, the injury directly affects a person’s current job, but you do not have to be already doing the specific type of work to suffer a loss of earning capacity.

Let’s say that a person’s dream was to become a surgeon. He completed medical school and was in the second year of his surgical residency (surgical training program) when a car accident left him without sufficient use of his hands to work as a surgeon.

He has lost that employment option and suffered a significant financial loss as a result, so his diminished earning capacity is compensable.

Ongoing Nature or Permanence of the Impairment

If you break your leg and temporarily cannot stand for long periods of time, the injury could cause you to lose income in the short-term while you recuperate from the fracture and undergo physical therapy to rebuild the strength in your leg. There can be a claim for lost wages for your current time off from work, but if you heal completely without any residual impairment, you probably will not get damages for decreased earning potential.

On the other hand, some injuries can set you up for work-related problems for the rest of your working life. A severe back injury, for example, can leave you unable to lift heavy objects even after the back heals. In situations like this, the impairment eliminates the prospect of many types of work.

Expert Testimony

Judges often want to hear testimony from experts for claims of diminished earning potential. Some of the experts on this issue can include:

Doctors who can testify about the permanence of the injury. The judge needs to know how long the medical professionals expect the effects of the injury to last.

Vocational experts who can testify about how the injury impairs the plaintiff’s work options. These professionals can explain how particular injuries affect the plaintiff’s current job or limit his future job possibilities.

Economic experts who can testify about the economic impact of the impairment on the plaintiff’s potential future earnings. Often, the vocational expert also serves as the economic expert by calculating or estimating the financial value of the plaintiff’s decreased earning potential.

Getting Help After an Injury

 

You do not have to sort out what your damages are and how you will prove them. The team at S. Burke Law will take care of the legal process for you. Give us a call today at 404-842-7838, and we will schedule a time to sit down with you and talk about your right to compensation. The consultation is free.