If you have been injured and are pursing compensation, it is natural to wonder about how much you might be entitled to. This amount is governed by satisfying specific set of criteria.
The first principle of note is that a claimant bears the onus of persuasion in court. This means that you must prove your losses on the balance of probabilities.
To recover compensation (damages) for loss of income, a claimant must prove two elements:
- Impaired capacity to earn income; and
- Financial loss arising from that impairment.
Proof of each element usually involves:
- Medical evidence showing that the claimant has suffered a loss of their pre-injury capacity to earn income; and
- Financial evidence showing that an actual loss of earnings has occurred or will in the future occur because of that lost capacity.
Loss of earning may be:
- Past (that is, from the date of injury up to the date of the assessment);
- Future (from the date of assessment onwards); or
Predicting Maintainable Future Earnings
In most cases pre-accident earnings (usually three full-years pre-accident) is the best way to predict what the maintainable future earnings would have been but for the accident.
One exception to the usual approach is where a claimant’s past earning history is not predictive of what the future earnings would have been but for their injury. That sometimes occurs where there is evidence that the consequences of the injury are likely to occur in the future, such as by a loss of employment, loss of advancement or promotion prospects, etc.
In such circumstances, courts sometimes award a global sum (on the basis that some loss is evident, but it is difficult to identify precisely what that loss amounts to).
Where a claimant was not earning an income at the time of the accident, in determining whether the claimant is entitled to compensation for loss of income, the court will consider whether the claimant would likely return to work and, if so, whether the claimant’s ability to return to work would likely be impacted by the accident injuries.
Mathematical precision is not essential provided the assumptions underlying the amount awarded are evidence based and clearly identified.
Evidence of future loss of earnings
Where evidence proves that future loss of earnings will likely occur:
- The net average weekly value of the future loss is reduced to present value using 5% actuarial tables (a calculation that mandated by government law); and
- The court will then further adjust that amount for vicissitudes (to adjust for the chance that future periods of income loss would likely have occurred in any event even but for the injury).
It is usual for Queensland courts to adopt a 15% discount for the vicissitudes (the changes) as a starting point and then adjust this upwards or downwards according to the specific evidence in each case.
Discounting for the usual contingencies (death, sickness, accident unemployment and industrial disputes), will increase according to the length of the period of economic loss under assessment.
Calculating the amount of compensation a claimant is entitled to is a complex process and depends on many factors. The same or similar injury can have a vastly different impact on a person’s employment, and consequently potential income, depending on the person’s occupation, amongst other factors. It is important to note that every case is different and must be assessed on the particular facts and circumstances of each individual case.