When you sustain personal injury in an accident, your claim is based on losses that your lawyer thinks you would be able to prove if your case went to trial. Although you probably feel that you have lost more than just money because of your injuries (be it a brain injury, a fracture, or chronic pain), a money judgment is the only way to compensate you for your losses.

One of these losses may well be lost income. In some cases this is simply a matter of calculation: for example, I take home $750 per week (after deductions), and I missed work for 4 weeks, so my loss is $3000.

But what if the loss you are talking about is in the future? What if you are still working and making money, but you think that, without your injuries, you would have been able to do even better? What if you will never quite recover from your injuries, so you will not be able to make that switch to a more physical job that you had been planning for?

This kind of claim is called “loss of earning capacity”. Historically, in Alberta, our Courts have accepted this kind of claim in only exceptional cases. For example, in one case, a young woman had a serious hand injury, and the Court accepted that some opportunities would not be available to her because of her ongoing limitations, and awarded her a sum of money for this loss.

Most injured people, however, are expected to accommodate to their injuries (“mitigate their loss”) by finding work that they can do, and do not get an award for lost capacity.

In contrast, the Courts in British Columbia (and some other provinces) are much more generous in awarding money for loss of earning capacity.

The good news is that there are now a few recent Alberta cases where loss of earning capacity has been awarded to injured people.

Some of the most important past and present cases are as follows:

Andrews v. Grand and Toy (Alta.) Ltd., [1978] 2 S.C.R. 229, at page 251:

1.01 It is not loss of earnings but rather, loss of earning capacity for which compensation must be made . . . A capital asset has been lost; what was its value?

Even if the Plaintiff post-injury is earning more income than pre-injury, there can still be a loss of earning capacity, pursuant to Pallos v. I.C.B.C. (1995), 6 B.C.L.R. (2d) 260 (BCCA).

Damages for loss of earning capacity are awarded when there is evidence demonstrating that the injuries will, or are likely to, impair a plaintiff’s earning capacity with regard to his previous occupation, or occupational options. The proof need not be that the future loss will likely occur,   but   that   there   is a   real   and substantial possibility and not   mere

speculation that the loss will occur. (Olson v. General Accident Assurance [2001] AJ 414 (Alta. C.A.). para. 24). Thus, the test for future losses is “real and substantial possibility”, and not “balance of probabilities.”

As well, most cases refer to the following four factors to be considered in determining the quantum for the loss of income earning capacity which were noted in the case of Brown v. Golaiy [1985] B.C.J. No. 31 at paragraph 8 (S.C.). They include a determination as to whether:

  1. The Plaintiff has been rendered less capable overall from earning income from all types of employment;
  2. The Plaintiff is less marketable or attractive as an employee to potential employers;
  3. The Plaintiff has lost the ability to take advantage of all job opportunities which might otherwise be open to him had he not been injured; and
  4. The Plaintiff is less valuable to himself as a person capable of earning income in a competitive labor

These factors have been referred to in several recent Alberta cases.

Sutherland v Encana Corporation, 2014 ABQB 182 (Michalyshyn J.) The plaintiff was awarded $40,000 for “the small but measurable risk of loss of capacity/competitive advantage”.

Chisholm v. Lindsay, 2012 ABQB 81, (Kenny J.) (currently under appeal). The plaintiff was awarded $125,000 for loss of earning capacity, even though Justice Kenny stated, “In my view, it is difficult if not impossible to determine what lasting impact her injury will have on her future earnings”. Nonetheless, Justice Kenny appears to have accepted that there would be some impact.

Prosser v 20 Vic Management Inc., 2009 ABQB 177, appeal on this issue dismissed 2010 ABCA 57 (CanLII) The plaintiff was awarded $50,000 for loss of earning capacity even though she had continued her career and there was no indication that her performance had suffered “even to the slightest degree”. Nonetheless “a diminution in her capabilities” was acknowledged by the trial Judge and upheld by the Court of Appeal, which stated that the trial Judge “made a finding that the appellant has not been rendered less capable of earning employment, less marketable, nor less able to take advantage of opportunities….but found the appellant’s own self-worth and subjective impression of her ability had suffered…. and awarded a loss of earning capacity as a result of the accommodations she may have to continue to make in order to manage her pain and continue at work.

It is therefore possible for injured people to be awarded money for their lost earning capacity.

If you decide to proceed with a claim, you should discuss this with your personal injury lawyer.

Article by Susan Fisher, a personal injury lawyer in Calgary, Alberta.