How Do You Prove Lost Income in a Personal Injury Claim

When you are involved in a personal injury claim, it is important to understand what economic loss & damages mean. Damages relate to the consequential harm or loss experienced by the Plaintiff as a consequence of someone else’s wrongful tortious actions or failure to act, giving rise to a personal injury claim of monetary compensation. Some of the potential personal injuries from wrongful tortious actions include a motor vehicle accident, workplace injuries, medical negligence, public liability and institutional historical abuse. Whilst compensation may not eradicate the losses, it is the attempt of the law to reach the next best resolution for the wrongdoing that has been committed.

Understanding Economic Loss

When an injury prevents you from working, temporarily or permanently, the financial implications can be substantial. The law recognises this and allows injured individuals to claim a compensation for the income they have lost and may continue to lose as a direct result of their injury. In a personal injury claim, the damages are assessed on legal principles and are intended to address both economic losses, such as lost income, medical expenses and care costs and non-economic losses, including pain and suffering, loss of amenities of life, loss of expectation of life and disfigurement.[1]

Proving Past and Future Economic Loss

To successfully claim damages for economic loss, you must provide evidence that clearly shows how your injury has caused financial harm on the assumption of obvious risk. This is assessed on the balance of probabilities meaning be more likely than not that the injury caused your loss.

In proving past economic loss, the Civil Liability act looks at what you would have earned had the injury not occurred. This often involves examining your pre-injury income and comparing it to your actual income during your recovery period. However, the law requires more than just a general claim; you must provide clear and reliable evidence to support the difference such as work history, changes in employment or business performance.

Future economic is more complex, assessing your ability to earn and how that will and has affected the future circumstances but for the injury. This is not only about your current inability to work, but also how your injury may affect your long-term earning capacity, career trajectory and job prospects. The courts consider a range of factors when assessing future economic loss, including your age, education, work experience, career progression prior to the injury, and any expert medical or vocational evidence that supports your diminished ability to work in the same capacity or at all. To establish this, it is often a requirement for supporting documentation such as medical reports that outline the physical and psychological harms, which will address how those limitations affected the job performance and economic assessments that project what your earnings would have been had the injury not occurred. The court will further apply a discount for vicissitudes of life to account for the uncertainties, unless evidence justifies lower or higher discounts. The goal remains restoring the injured party, so far as money can, to the position they would have been had the wrong not occured.

Common Challenges in Proving Loss of Income

Proving lost income is not always straightforward, and many clients face genuine difficulties when it comes to presenting the claim. One of the most common issues arises when a person has an irregular work history or earned income through casual, freelance work or disrupted work from mental, emotional and educational consequences. These issues make it more difficult to prove what would have been earned had the injury not occurred. Furthermore, in consideration of the law, you are expected to take reasonable steps to reduce your losses. This means that, where possible, all attempts should be made to return to work, explore alternative employment or retrain for different roles. In relation to historical abuse many survivors find it difficult due to the psychological harm such as PTSD, depression.

Adding to some of these challenges is the issue of limited evidence available. In historical matters, there may only be a few documents and to provide a precise economic impact of the harm can be difficult to quantify. In this situation, piecing together the available evidence, relying on expert opinion and considering broader social, family and economic facts will assist to bridge the gap.

Despite the challenges, the legal systems do recognise the profound and enduring impact on people that have experienced personal injury. With the right support, careful preparation, and professional guidance, it is possible to present a strong and compelling claim for the financial losses that have resulted from the injuries suffered.

Final Remarks

Proving lost income in a personal injury claim requires a careful and structured presentation of evidence that supports both the occurrence of the injury and its financial consequences. While the process can be complex, the legal framework does allow for the fair assessment of loss. With the proper documentation, expert reports, legal guidance, claimants can successfully seek compensation that recognises both the tangible and intangible effects of their injury.

[1] Civil Liability Act 2002 (NSW) s 3