- October 24, 2017
- by Will Davidson LLP
- future lost income, lost income, Ontario personal injury lawyer, personal injury, Personal Injury Lawyer, Toronto personal injury lawyer, Will Davidson LLP,
One of the purposes of financial compensation in personal injury lawsuits is to ensure the injury victim retains the same financial standing as if the injury had not occurred. As such, personal injury lawyers must ensure that the trial judge and jury understand the scope of their client’s existing financial position and potential lost future income.
This can be a complicated process: not only is it difficult to determine economic loss, but it must be calculated and communicated so that members of a jury, who are unlikely to be financial experts, can make a fair judgment on compensation.
Personal injury lawyers rely on physicians’ expert testimony to explain physical injuries, and often enlist financial experts, such as accounts or economists, to describe monetary damages. Past and future lost income is central to this calculation.
Past and future lost income
Determining a plaintiff’s past and future lost income is crucial to awarding fair financial compensation. To do so, a financial expert will review the plaintiff’s financial history and make assumptions about the industry they work in and their employment record to produce an estimated income stream. Next, they will determine how long the injured individual would likely remain in the workforce and predict the total amount of revenue lost.
However, calculating future lost income is more difficult than simply “multiplying your annual income by the number of years you would have remained in the workforce,” wrote Najma Rashid in a recent post for the Ontario Trial Lawyers Association’s blog. The financial expert must also establish the “present value” of the plaintiff’s income stream. Rashid defines present value as “the current value of a stream of income in the future, using a discount rate.” The concept acknowledges that money earns interest over time, which is reflected in the lump sum a plaintiff receives.
There are innumerable potential complications in calculating an individual’s lost future income. What if the injured person is a child, for instance? Or perhaps they are relying on health benefits or a pension through their place of work – do those lost perks come in to play? Personal injury lawyers must work closely with financial experts to determine an accurate portrait of their clients’ financial situation and communicate this to the jury.
If you or a member of your family has been injured in an accident, contact the personal injury lawyers at Will Davidson LLP today to learn how our experienced and compassionate team can help. Will Davidson LLP has assisted injured Ontarians for years, and can help you gain access to compensation for your injuries.