Effective Presentation of Evidence of Economic Damages for Partial Loss of Earning Capacity

June 21, 2007

Richard A. Cohn

A Common Shortcoming — The Failure To Recognize Economic Loss In The Case Of Partially Disabled Personal Injury Plaintiffs.

Over the years, I have heard numerous lawyers describe their personal injury cases, whether in casual conversation or in consultation on potential referrals to our law firm. Likewise, I have regularly reviewed jury and settlement reports (as I am sure most readers of this article commonly do.) An all too common shortcoming arises in addressing the issue of economic damages in cases where the plaintiff is only partially (albeit permanently) disabled or limited in their capacity to earn.

The issue which frequently arises is: How to measure and present evidence of economic damages for loss of earnings capacity (both past and future) when the partially disabled plaintiff has resumed working and earning as much as, (or even more than) he was earning prior to the subject incident? Under such facts, lawyers all too often simply concede that there are no future economic damages for loss of earnings/earnings capacity — despite the existence of evidence that the client’s injury does affect his ability to work. This article teaches that just because the plaintiff, who is partially disabled, is back at work (and earning as much or more as before his injury) does not mean there is no continuing economic loss. There are a variety of persuasive ways to prove up the true economic harm that results in such cases.

The legal Premise — Impaired Capacity to Earn

The legal premise which is so often overlooked is that economic damages result when the Plaintiff’s capacity to earn is impaired. BAJI 14.12 provides that a jury may award economic damages for “the present cash value of earning capacity reasonably certain to be lost in the future as a result of the injury in question.” “Loss of earning power is an element of general damages which can be inferred from the nature of the injury, without proof of actual earnings or income either before or after the injury, and damages in this respect are awarded for the loss of ability thereafter to earn money.” Connolly v. Pre-Mixed Concrete Co. (1957) 49 Cal.2d 483, 489; See also Gargir v. B’Nei Akiva (1998) 66 Cal.App.45h 1269.

A Plaintiff who now performs tasks 10% slower than prior to his injury arguably has a 10% loss of earning capacity — regardless of whether his employer continues to compensate him at the same rate of pay, or even gives him a raise! Likewise, a self-employed Plaintiff who is 15% impaired from working as productively and/or as many hours per day as he did before his injury has an impaired capacity to earn and therefore an economic loss — even if his business is doing better than before his injury and he is making more money than ever. Under such facts, the plaintiff’s partial loss is his loss of the capacity to work at his pre-injury ability, regardless of his actual post-injury earnings. Of course, the defense will argue to the contrary; but very persuasive arguments can be made which will yield higher jury (and/or arbitration) awards and enhanced settlement values. So long as one is not perceived as “overreaching” or “stretching”, there is certainly nothing to lose and everything to gain in presenting evidence of economic loss due to impaired capacity to earn in effort to maximize the value of one’s case.

Identifying Evidence of Partial Loss of Earning Capacity — Using Both Subjective and Objective Pieces of the Puzzle.

There are always both “subjective” and “objective” pieces of evidence to demonstrate the value of the Plaintiff’s partial loss of earning capacity. It is the mixed presentation of both that brings to life the true nature of the loss in a believable and understandable fashion, tied together in a cohesive closing argument.

Examples of “subjective” evidence of a partial loss of earnings capacity would include the Plaintiff’s own testimony that due to his injury, things take longer to do at work, he cannot work as many long hours, he cannot keep the same schedule, he cannot concentrate as well as he did before, and/or he cannot do certain tasks as well, or without help, etc. . . This testimony can be corroborated by employers, coworkers, colleagues, etc. . . It is essential to use specific factual examples, such as: “work tasks generally take an extra hour or two per day due to the disability”; or, “the previously kept average 10 hours per day schedule has been reduced to only 8 hours per day due to the injury”; or, “due to the inability to do a continuous 8 hour work day, an hour rest period has been required.” These are simply examples. One must work with the client to quantify (in terms of time or percentage of productivity level) the actual effect that the injury truly has had on the client’s specific work tasks.

The “objective evidence is then used to corroborate the subjective evidence. For example, the Plaintiff’s doctor can testify to the objective evidence of Plaintiff’s injury, and that the injury would, in fact, be expected to affect the Plaintiff’s ability to work to a certain extent. (Often times, even the defense doctor will admit to such a generic comment.) The doctor can point out why the injury will cause Plaintiff to be slower at certain tasks, or why the Plaintiff will need rest periods or an accommodating schedule which will affect productivity. The doctor can confirm that Plaintiff would be expected to suffer from pain or discomfort due to his injury which will in turn affect concentration and productivity at work. Most importantly, the properly prepared expert doctor can objectively quantify the Plaintiff’s percentage of partial disability, based upon objectively verifiable standards and guidelines (along with the expert’s background, training and experience). There are a number of publications which set forth guidelines and standards on which an expert can base the opinion that a Plaintiff is a certain percent disabled due to his injury. For example, the American Medical Association publishes a book entitled “Guides To The Evaluation of Permanent Impairment” which has as its purpose the goal giving doctors the basis for “objectively” quantifying the percentage of disability of an injured person. The fact that this criteria is put forth by the American Medical Association certainly enhances its credibility. Further, the selected percentage of disability should be consistent with the Plaintiff’s own testimony of his subjective complaints, so that the attorney can tie the pieces of the puzzle together in closing argument.

Indeed, it is the consistency between and among all pieces of the subjective and objective evidence that enables the attorney to then present a believable, persuasive and coherent closing argument (reviewing all pieces of the puzzle to demonstrate the loss of the capacity to earn and its value). Several examples follow:

Examples: How to Prove Up Partial Loss of Earning Capacity and Its Value.

Example A:

Plaintiff, 48 year old physician (OB/Gyn) was rear-ended in his tank-like Mercedes at moderate speed by under-insured driver. Plaintiff felt moderate low back pain at the scene, but did not report it until days later to an orthopedist pal. Plaintiff missed one day of work immediately following the accident. An MRI one month later showed a lumbar disc bulge, but a repeat MRI the following year showed that the disc had receded. Nonetheless, plaintiff still reported mild low back pain (as his UIM Binding Arbitration approached 24 months post-accident) which increased to moderate pain in certain circumstances. In particular, Plaintiff’s pain exacerbated if he performed two or more lengthy surgical procedures per day, or if he worked longer than eight or nine hours per day. Prior to the incident, he would work ten or twelve hours per day; and it was both common and, indeed, most productive to perform all surgeries in a given week on one day — with three or four procedures back-to-back. Thus, due to his injury, Plaintiff was certainly still able to work full time; but his capacity had been diminished. The switch from ten or twelve hour days to eight or nine hour days along with the need to schedule surgeries in an unproductive fashion (rather than back-to-back all on one day) were the “subjective” pieces of evidence supporting Plaintiff’s economic claim. However, Plaintiff’s actual earnings were still just about as high as before the incident, and the defense would argue that any loss was actually due to other causes, such as health insurers decreasing their payments for his services.

Objectively, Plaintiff’s doctors testified that his pain symptoms were consistent with his injury and would be expected under the facts described above. Likewise, they testified that it would be reasonable for Plaintiff to alter his schedule to avoid exacerbation of his back pain. They also testified that Plaintiff’s “objective” percentage of partial permanent disability was between ten percent and fifteen percent (pursuant to established American Medical Association guidelines).

Plaintiff earned nearly $300,000 per year for the three years before and the two years after the incident. In closing argument, Plaintiff’s counsel argued that Plaintiff had sustained, and would continue to sustain, a loss of earning capacity approximating ten to fifteen percent of $300,000.00 annually for the rest of his work life, as opined by the experts. (Even the defense doctor admitted that Plaintiff’s work would be “affected” — whatever that means.) The percentage of disability was coincidentally consistent with Plaintiff’s own testimony: he had lost one to two hours out of his ten plus hour normal day — a ten percent to twenty percent daily loss. All the pieces of the puzzle were carefully fit in place.

Defendant had offered only $15,000.00 prior to the Binding Arbitration, claiming no economic loss. Plaintiff had demanded $100,000.00. The arbitrator awarded over $700,000.00, virtually all in economic damages.

Example B:

Plaintiff, a 47 year old computer programer/analyst received a negligently administered injection of a caustic drug into his forearm. The result was a painful nerve injury causing pain and hypersensitivity to the Plaintiff’s left (non-dominant) hand. Plaintiff had excruciating pain symptoms for approximately four weeks, but was able to return to work thereafter full-time, but with continuing moderate pain in his index and long fingers on a permanent basis. Unfortunately also during that four week period, Plaintiff missed a potential opportunity to take a new job with wages increased from $60.00/hour up to $65.00/hour. Plaintiff continued at his pre-injury job for $60.000 per hour up to and through the time of trial, two years post-incident.

Subjectively, at trial plaintiff testified that his pain and sensitivity in the index and long fingers of the left hand slowed his typing skills, distracted his concentration, and led to errors on the computer keyboard. He testified that he now took “an extra hour or so” every day to get as much done as previously. He felt awkward and uncomfortable charging his employer for that extra time, so he “wrote it off.” His typing speed was off by approximately fifty percent.

Objectively, Plaintiff’s physicians agreed that his subjective complaints were consistent with his injury and would be expected under such facts. They testified that the partial impairment of his left hand had caused plaintiff to be approximately seven percent disabled (again based on the American Medical Association Guidelines). In closing, Plaintiff’s counsel argued that the “objective” seven percent disability was coincidentally consistent with Plaintiff’s testimony that “things take an hour or so longer” to do at work each day, as well as with the loss of $5.00 per hour in wages (from $65.00 down to $60.00 per hour, which is roughly a 7.5% loss). The jury awarded almost $80,000.00 in future economic damages based on this proof, despite that Plaintiff was earning the exact same amount of money at the time of trial as he was prior to his injury. (A chart summarizing the evidence of the partial loss of earnings capacity that was used at trial appears below:)

Evidence Indicating Loss of Earning Capacity — Partial

Dr. Smith – 5-8% impairment of work per AMA Evaluation Guidelines

• Dr. Jones – Agrees plaintiff’s work is affected and will continue to be.
• Even Dr. Defense admits that decreased productivity = impairment.
• Typing speed down 50%.
• Pain affects concentration/productivity.
• Plaintiff “writes down” time – doesn’t bill 1-2 hours out of 20 = 5-10%.
• Has been losing and will continue to lose $5.00/hour for next years to come.

Conclusion

As can be seen, one can piece together an argument for future loss of earnings in almost any circumstance where a Plaintiff has sustained even a small yet permanent partial impairment of his ability to perform his employment tasks. The method of identifying both the subjective and objective pieces of evidence that support the claim for loss of earning capacity, and then pointing out their consistencies in closing argument, creates a believable, understandable and persuasive format that the trier of fact can easily follow and apply.

Contact Aitken * Aitken * Cohn today to learn more.