If you’ve suffered an injury that wasn’t your fault, one of the most serious consequences can be an inability to work. This can have major financial implications and cause a lot of stress and worry.
If you’re in this situation, you may be able to claim loss of earnings as part of your personal injury claim, ensuring you do not miss out on the money you would have earned were it not for the injury.
What is loss of earnings?
Personal injury claims are divided into two parts – general damages and special damages. General damages allows you to claim compensation for the pain and suffering caused by your injury, while special damages relates to any money you have lost as a direct result of the accident. Loss of earnings falls under special damages, which can also include things such as the cost of medical treatment and travel expenses.
How are loss of earnings calculated?
To claim loss of earnings, you’ll need to be able to produce evidence of the money you’ve lost as a result of your injury. The best way to do this is to provide payslips for an extended period of time, normally around six months pre-injury, to show a detailed history of your earnings. This information will then be used to calculate the amount of money you have missed out on due to your injury. In a simple claim, this would be your monthly wage multiplied by the period of your absence.
Medical evidence must also demonstrate that your period of absence is directly attributable to the accident. This is because all claimants have a duty to mitigate their losses. This means you have taken reasonable action to prevent the losses caused by your injury from getting worse. For loss of earnings, this means you have returned to work as soon as it becomes possible, even if this means being placed on light duties. If you fail to do so, your compensation claim could be negatively affected.
Overtime and benefits
It is possible to claim loss of earnings from overtime if you can produce evidence to show
that you have regularly worked overtime in the past and that such work would have been readily available during the period when you have been unable to work due to your injury. To claim any other benefits, such as lost pension, you must be able to show that you were entitled to these in the past.
If you’re self-employed, claiming loss of earnings can be more complex. The process is
easiest if your accountant is informed about your inability to work as soon after your accident as possible. It is vital to be able to produce orders, invoices and information of any contracts that couldn’t be completed due to your injury in order to prove you have missed out on work. Ideally, your accountant should be able to provide detailed profit and loss accounts and tax returns covering at least three years to help the court get a reliable picture of your income.
What does it mean for my claim?
If you have suffered an accident that wasn’t your fault and have been unable to work as a
result, loss of earnings may represent a significant proportion of your personal injury claim. Hayward Baker will advise you on your claim and calculate the loss of earnings you have suffered. Evidence will then be presented to the court, which will reach a conclusion about how much money you have missed out on due to the injury and award the appropriate compensation. This compensation will be in addition to any you are awarded for general damages.
Loss of earnings example
The table below demonstrates a very basic loss of earnings claim would be calculated:
|Month||Net wages||Net annual income based on average wage||Net daily wage based on 5-day working week||Number of days absent due to injury||Net loss of income|
|Average monthly wage||£1,583.33|
Other factors that will need to be considered could include Statutory Sick Pay (SSP), bonuses or overtime.