future earnings

In this personal injury appeal, the Court of Appeal addressed the quantum of damages for past and future loss of income arising from a motor vehicle accident (Tigas v. Close, 2024 BCCA 223). The injury claimant alleged a loss of over $3 million at trial and was only awarded under $500,000. The appellants contested the trial judge’s application of the Rab v. Prescott  test, arguing that it was not properly employed to evaluate whether there was a real and substantial possibility of a loss of earning capacity and the likelihood and extent of such loss. The injury claimant alleged the trial judge undervalued her future loss of income.

The appeal and cross-appeal were ultimately dismissed, with the court finding that the trial judge’s award was reasonable and not inconsistent with the evidence. Justice Harris, delivering the judgment, noted that although the trial judge did not explicitly detail the Rab framework, the overall assessment and resulting award did not misapply the test. The judge found that the respondent’s injuries modestly impacted her earning capacity, reflecting the modest damages awarded.

The case stemmed from a 2017 motor vehicle accident where the claimant, aged 33, was injured. The trial judge held the appellants fully responsible for the accident, awarding various damages, including $163,980.64 for loss of future earning capacity. Before the accident, despite her dyslexia and intermittent academic struggles, the claimant had a varied employment history, including roles at BC Ferries and the Watson Centre for Brain Health. After the accident, she faced difficulties returning to her pre-accident employment levels but eventually secured a position at Grouse Mountain, earning $62,000 annually by the time of the trial.

Application of the Rab Test

The Rab v. Prescott test involves a three-step process for claims of loss of future earning capacity:

  1. Evidentiary Requirement: The evidence must indicate a potential future event that could lead to a loss of capacity.
  2. Real and Substantial Possibility: The evidence must show a real and substantial possibility that this future event will cause a pecuniary loss.
  3. Assessment of Value: The court must assess the value of the possible future loss, considering the likelihood of the possibility occurring.

Trial Judge’s Analysis

The trial judge found a “chronic injury” satisfied the first step of the Rab test but faced difficulties with the second and third steps. The claimant alleged she would have earned significantly higher wages working in marketing and sales roles at companies associated with Howard Eaton, founder of the Watson Centre. However, the judge deemed this speculative due to a lack of supporting evidence about the viability of Eaton’s companies and Close’s suitability for those roles.

The judge concluded that without the accident, the annual earnings would have likely reached $70,000, but due to her injuries, they would remain around $60,000. This led to an ongoing loss of $10,000 annually until her retirement, calculated based on the economic expert’s approach.

Appeal and Cross-Appeal of Loss of Earning Capacity

On appeal, the appellants argued the judge overestimated the earning capacity, while the claimant contended the judge undervalued her potential earnings without the accident. The court found that the judge’s modest assessment was justifiable and aligned more closely with the appellants’ position, rejecting the higher speculative earnings projected by Close.

Court of Appeal Decision

The Court of Appeal upheld the trial judge’s decision, affirming that the damages awarded for loss of earning capacity were reasonable and reflected the modest impact of Close’s injuries. This judgment clarifies the application of the Rab test. The Court of Appeal suggests that a trial judge does not have to explicitly detail the Rab test in the reasons for judgment so long as the underlying findings are articulated.

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