How is lost earning capacity calculated in a catastrophic injury case?

In a catastrophic injury case, lost earning capacity is calculated by looking at the person’s current age and life expectancy, their current job or job market, their prior wages and job history, and any additional education or training that may be necessary to gain a new job. To determine an exact number, an economist or other financial expert may be brought in to assess the victim’s earning capacity before they suffered the injury and the amount of lost wages or future earning capacity they are likely to suffer due to the injury. The calculation of lost earning capacity can be complex, and the methods used to determine this figure vary from state to state. In Tennessee, the calculation is based on a three-step process. First, the court reviews an expert’s evaluation of the victim’s financial situation, including their current salary levels, job history, age, and life expectancy. Second, the court will consider the victim’s education and qualifications, job history and current salary level, and any other special qualifications or circumstances that may affect their earning capacity. Third, the court will consider any lost wages due to the victim’s inability to work, their potential additional income from education or training, and their age and life expectancy. The court may also consider special factors such as the victim’s emotional state and any mental disabilities resulting from the catastrophic injury. In these cases, the court will use a variety of resources to determine a fair amount for the victim. Ultimately, the victim’s lost earning capacity is an important factor in determining the amount of compensation they may receive in a catastrophic injury case.

How is lost earning capacity calculated in a catastrophic injury case?

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