The Honourable Mr. Justice Skolrood in Kweon v. Roy,2016 BCSC 2305  is the source of today’s article about evaluating loss of income in ICBC personal Injury claims. In Kweon the ICBC claimant was awarded $165,000 for Loss of future earning capacity and $175,000 for pain and suffering.

The Court of Appeal in Ibbitson v. Cooper, 2012 BCCA 249 at para. 19, citing its earlier decision in Rowe v. Bobell Express Ltd.,2005 BCCA 141 commented:

While in many cases the actual lost income will be the most reliable measure of the value of the loss of capacity to earn income, this is not necessarily so. A hard and fast rule that actual lost income is the only measure would result in the erosion of the distinction made by this Court in Rowe: it is not the actual lost income which is compensable but the lost capacity i.e. the damage to the asset. The measure may vary where the circumstances require; evidence of the value of the loss may take many forms (see Rowe). As was held in Rosvold v. Dunlop, 2001 BCCA 1 at para. 11, 84 B.C.L.R. (3d) 158, the overall fairness and reasonableness of the award must be considered taking into account all the evidence. An award for loss of earning capacity requires the assessment of damages, not calculation according to some mathematical formula.

The first issue is to address the question of whether the ICBC claimant had proven a real and substantial possibility that his earning capacity had been impaired. If the plaintiff discharges that burden of proof, then the judge must turn to the assessment of damages. The assessment may be based on an earnings approach or the capital asset approach.

 The Earnings Approach

The earnings approach is generally appropriate where the plaintiff has some earnings history and where the court can reasonably estimate what his or her likely future earning capacity will be. This approach typically involves an assessment of the plaintiff’s estimated annual income loss multiplied by the remaining years of work and then discounted to reflect current value, or alternatively, awarding the plaintiff’s entire annual income for a year or two. While there is a more mathematical component to this approach, the assessment of damages is still a matter of judgment, not mere calculation.

The Capital Asset Approach

The capital asset approach, which is typically used in cases in which the plaintiff has no clear earnings history, involves consideration of a number of factors such as whether the plaintiff:

                           i.   has been rendered less capable overall of earning income from all types of employment;

                          ii.   is less marketable or attractive as a potential employee;

                        iii.   has lost the ability to take advantage of all job opportunities that might otherwise have been open; and

                        iv.  is less valuable to him or herself as a person capable of earning income in a competitive labour market.

In Kweon the claimant established a real and substantial possibility that her earning capacity has been impaired. In applying the Capital Asset Approach the Judge comments:

[221]  On balance, I think that the negative contingencies outweigh the positive and that it is reasonable in the circumstances to award additional damages to take account of likely future employment interruptions. In other cases in which it has been difficult to assess the actual likely income loss, and the capital asset approach has been applied, courts have awarded the equivalent of one, two or more years of salary to compensate for the diminishment in the plaintiff’s capital earnings asset. See Strilec v. Leila, 2015 BCSC 1515; Cooper v. Royal Canadian Mounted Police, 2001 BCSC 1788; Brown v. Golaiy (1985), 26 B.C.L.R. (3d) 353.

To learn more check out our helpful checklist for making a future income loss claim.

Posted By ICBC Personal Injury Lawer Mr. Renn A. Holness, B.A. LL.B.

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