Analysis of Loss of Future Earning Capacity

The legal principles were highlighted in Cantwell v Warren, 2017 BCSC 856 (CanLII):

Perren v. Lalari, 2010 BCCA 140 (CanLII), at para. 32, provides that:

A plaintiff must always prove … that there is a real and substantial possibility of a future event leading to an income loss.  If the plaintiff discharges that burden of proof, then depending upon the facts of the case, the plaintiff may prove the quantification of that loss of earning capacity, either on an earnings approach … or a capital asset approach. …

[Emphasis in original.]

[79]        In Pololos v. Cinnamon-Lopez, 2016 BCSC 81 (CanLII), Voith J. set out, at para. 133, the legal principles for determining loss of future earning capacity:

The relevant legal principles are well-established:

  1. To the extent possible, a plaintiff should be put in the position he/she would have been in, but for the injuries caused by the defendant’s negligence; Lines v. W & D Logging Co. Ltd., 2009 BCCA 106 (CanLII) at para. 185, leave to appeal ref’d [2009] S.C.C.A. No. 197;
  2. The central task of the Court is to compare the likely future of the plaintiff’s working life if the Accident had not occurred with the plaintiff’s likely future working life after the Accident; Gregory v. Insurance Corporation of British Columbia, 2011 BCCA 144 (CanLII) at para. 32;
  3. The assessment of loss must be based on the evidence, but requires an exercise of judgment and is not a mathematical calculation; Rosvold v. Dunlop, 2001 BCCA 1 (CanLII) at para. 18;
  4. The two possible approaches to assessment of loss of future earning capacity are the “earnings approach” and the “capital asset approach”; Brown v. Golaiy (1985), 1985 CanLII 149 (BC SC), 26 B.C.L.R. (3d) 353 at para. 7 (S.C.); and Perren v. Lalari, 2010 BCCA 140 (CanLII) at paras. 11-12;
  5. Under either approach, the plaintiff must prove that there is a “real and substantial possibility” of various future events leading to an income loss; Perren at para. 33;
  6. The earnings approach will be more appropriate when the loss is more easily measurable; Westbroek v. Brizuela, 2014 BCCA 48 (CanLII) at para. 64. Furthermore, while assessing an award for future loss of income is not a purely mathematical exercise, the Court should endeavour to use factual mathematical anchors as a starting foundation to quantify such loss; Jurczak v. Mauro, 2013 BCCA 507 (CanLII) at paras. 36-37.
  7. When relying on an “earnings approach”, the Court must nevertheless always consider the overall fairness and reasonableness of the award, taking into account all of the evidence; Rosvold at para. 11.

The Plaintiff claims $1,234,800.

The Defendant argues the award can not be more than $300,000.

The Evidence

  • Economist’s report assumes the Plaintiff will remain unemployed for the rest of her life
  • Medical Evidence is supportive of this assumption
  • Some of the evidence does not rule out all types of employment (although not encouraging)
  • Calculation was based on the present value of the “average” Canadian female to the age of 65
  • Based on a female same age as the Plaintiff
  • With equivalent of high school education

Figures totals $787,200, and assumes full-time, continuous employment.

Higher figures were provided but were not accepted as they were based on a higher education and earnings that were not parallel to that of the Plaintiff.

The Court stated that full-time, continuous employment over 30 years is not realistic, particularly due to the fact that the level of education was high school.

There were no contingencies for the fact that the Plaintiff had medical conditions prior to the collision which would also have provided limitations over a 30 year earning’s period. The evidence did not touch on the negative contingencies as the expert was not provided with information on this subject, nor asked to comment on this potential issue.

The court concludes that these negative contingencies ought to have been considered in this case.

Court’s Conclusion

 “I find that $787,200 is far too optimistic as a measure of Ms. Cantwell’s future lost earnings capacity.  Having regard to the principles expressed in Pololas, above at para. [79], I must exercise my own judgment, and always consider the overall fairness and reasonableness of the award, taking into account all of the evidence.  In doing so, I reduce the number under this head from $787,200 to $550,000.  (I recognize that the “starting” number for this analysis, in a sense, is not $787,200, but instead $1,234,800, being the amount claimed.  However, above, at para. [83], I rejected at the outset amounts tendered by Mr. Wickson above the $787,200 average figure.)”

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