Past lost wages are generally a straightforward matter.
In a serious personal injury action, though, the injured person's future earnings must be considered.
This occurs in two ways. If that injured person will be incapacitated for a period of time after the trial and was working prior to the injury, a reasonable measure of damages is the average wage earned prior to the incapacity, projected over the length of the incapacity. "In an action for personal injuries, a plaintiff may recover for loss of future earnings which will reasonably and probably result from the tort. Monias v. Endal, 330 Md. 274, 623 A.2d 656 (Md., 1992). Alternatively, "[a] tort victim suing for damages for permanent injuries is permitted to base his recovery on his prospective earnings for the balance of his life expectancy at the time of his injury undiminished by any shortening of that expectancy as a result of the injury." Sea-Land Services, Inc. v. Gaudet, 414 U.S. 573, 595, 94 S.Ct. 806, 819, 39 L.Ed.2d 9, 26 (1974).
What if the person is not working at the time of the injury, or, has just started a new career that is expected to yield income, but has not yet? Consider that this person cannot any longer work in that new field because of their injuries. That is a different type of claim.
Under Maryland Law. A loss of earning capacity claim is different than a claim for a loss of future wages claim.
"There is a distinction between loss of earnings and loss of earning capacity. A person is entitled to compensation for the lost capacity to earn, whether he would have chosen to exercise it or not. Most courts which have discussed the subject have held that it is not necessary to show either the plaintiff's earnings prior to the injury or decrease in earnings after the injury in order to establish the fact of loss of earning capacity." Monias v. Endal, 330 Md. 274, 623 A.2d 656 (Md., 1992) How does one prove what their "earning capacity" is? "Essentially, an accident victim is entitled to be compensated to the extent his or her power to work in an activity that produces income has been reduced by the injury. There is no fixed rule by which the amount of damages for diminution or impairment of earning capacity may be definitively measured. Instead, all relevant facts on the issue must be considered. The prevailing proper measure of lost earning capacity is the difference between the amount that the plaintiff was capable of earning before his injury and that which he is capable of earning thereafter. Essentially, the plaintiff must establish the disparity between the market value of his services before and after the injury." Anderson v. Litzenberg, 694 A.2d 150, 115 Md.App. 549 (Md. App., 1996).
As you might imagine, these types of cases can become complex. Typically, the expert testimony of one or more economists, vocational experts, or those practicing in other related disciplines, is needed to prove the claim. It is a virtual certainty that if the Plaintiff employs an expert to demonstrate their lost capacity, the insurance company will hire one or more experts to diminish, deny or defeat that claim.
-This Article was updated by Eric Kirk on 3/7/19.