Lost earnings analysis applied to motor vehicle accident litigation: methodology, deliverables, and case-specific considerations.
Motor vehicle accident claims span the full range of lost earnings work, from a documented period out of work after an orthopedic injury to a lifetime loss after a catastrophic crash. The economist documents the date the person left work, any return at full or reduced capacity, and the employer's records on accommodation, then builds the but-for and post-injury paths from those facts. Because policy limits often frame the practical range, counsel commonly ask for the past loss, the future loss, and the lost fringe benefits stated separately so the same report serves settlement evaluation and trial.
Past and future lost earnings and fringe benefits for a person whose injury has removed them from work or reduced what they can earn. The analysis builds from the earnings history, projects the but-for path over the person's expected worklife with wage growth, and discounts the future stream to present value. When the person can still work in a reduced capacity, the loss is framed as diminished earning capacity, with the post-injury path drawn from a vocational opinion or the treating record and offset against the but-for projection.
The claim is made up of past lost earnings while the person was out of work, future lost earnings or reduced earning capacity where the injury limits the work the person can return to, lost fringe benefits, the replacement cost of household services during recovery and afterward, and the present value of future care costs when a life care plan or treating recommendations exist. For a fatal crash the analysis becomes a wrongful death loss to the survivors. The drivers are the earnings and benefit history, the employer's records on the period out of work and any accommodation, and the medical and work-capacity opinions in the record.
We issue the final report in disclosure-ready form and provide deposition and trial testimony, rebuttal of opposing economic opinions, and updated calculations as new records arrive.
It depends on the terms of the return. A full return to the same job at the same pay usually leaves only a past loss. A return at reduced hours, lower pay, or to work with fewer benefits or less advancement leaves an ongoing gap that should be measured over the remaining worklife.
The earnings base is projected from the educational path and occupational earnings data for the work the person was preparing for, rather than from a short earnings history. The report states the occupation and education level assumed and the source of the earnings data so the assumption can be tested.
Request a consultation on Lost Earnings or call (201) 343-0700. Plaintiff and defense counsel.