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In the world of serious injury, the most significant aspect of a claim is often the loss of earnings. For many of our clients, especially those who have suffered serious injury, extended time off work, the ability to return to work, or being unable to continue in a previous role, are common experiences.

Understanding how and what you can claim for can raise more than a few questions. This practical guide aims to answer some of the most common questions from clients about their losses and what information you will need to provide in order to fully support your losses.

What can I claim?

The simple answer is it will depend upon the circumstances surrounding your claim. At the beginning of your claim, your legal representative will ask you to fully explain what your employment situation was before the accident and how this has been impacted due to your accident injuries.

In the majority of cases, there will be the possibility to claim for net lost wages, lost benefits, pension contributions and lost opportunities. The most seriously injured clients may also have claims for future loss of earnings.

Information and evidence

The information you need to provide is different depending on your employment circumstances.

What information do I provide if I am employed?

The extent of your past losses as an employee will depend upon your sickness pay and the terms you have with your employer.

You would generally be receiving statutory sick pay at the very least and, if this is the case, you would be entitled to recover the difference between the statutory sick pay received and your net average wages. This type of loss can be proven with just wage slips in a lot of cases.

You may be in a fortunate position where you receive statutory sick pay that is then supplemented with additional sick pay in line with the terms of your contract with your employer. Alternatively, your employer may pay you in full for your time off. In either of these situations, you would not see a reduction to your wages and as such you would not have a valid claim for past loss of earnings.

It is important to note that if you do receive full pay, you need to keep your employer fully up to date, as it may be that you have terms as part of your contract that allow your employer to recover their outlay for payments made to you whilst you were injured. This contractual obligation is common for clients that work for councils or the NHS. If not included within your claim, your employer can approach you to repay the funds directly, so it is vital that any employer outlay is included in your claim.

What information do I provide if I am self-employed?

If you are self-employed, it can be harder to prove a loss of earnings than those who have a regular amount paid in wages. The most important rule to remember as a self-employed client is that, if you cannot provide documentary evidence of a loss, it is unlikely that a defendant will make an award for this head of claim.

Documentary evidence will include:

  1. Profit and loss accounts and tax returns for three years before your accident.
  2. Written records of your appointments/jobs to illustrate how your earnings were reduced.
  3. If you have an accountant, often they can provide you with written evidence of the reduction to your earnings.

The above list is not exhaustive, but just remember to provide your legal representative with as much supportive information as possible.

What future losses can I claim?

Future loss of earnings can refer to several different scenarios.

You can return to your pre-accident role but require further surgery

You will likely have further time off work to recover and losses associated with this further time off work can be included. For this type of loss, it would be a matter of using your wage slips to illustrate what your loss is likely to be and include this in your claim.

You have to take up a different position due to injuries

It may be that due to your injuries you are prevented from returning to the same job you were doing before the accident and had to take up a different position that has resulted in a reduction to your wages. In this situation, you would be entitled to recover the difference between your pre-accident earnings to your post-accident earnings.

You’re unable to work at all

In more serious injury cases, it may be that your accident injuries have resulted in permanent disability, meaning that you are unable to work at all. In this situation, your legal representative will be looking to present a head of claim for what you could have earned without your injury up to retirement.

For all future loss of earnings claims, it is important to have medical evidence in support of the need for surgery, reduction in wages, and inability to work.

How are future losses calculated?

If you are unable to work following your accident, the court use a process that assesses your earning potential up to retirement age.

They would start with your net annual loss known as the “multiplicand”. They would then consider your retirement age and apply a suitable reduction using the “Ogden tables” to consider the fact that you are to receive a lump sum well in advance of the anticipated future loss. The factors the Ogden table considers are age, gender, and life expectancy.

To be successful in the above future loss of earnings claim, clients are deemed to be disabled as per The Disability Discrimination Act 1995 and this is supported by medical evidence. You may find that you do not meet the criteria under this act for a full future loss claim, and as such it may be possible to include a “Smith v Manchester” claim.

A Smith V Manchester claim is made where a client is deemed to be disadvantaged on the open labour market. This again needs to be supported by way of medical evidence to be successful. This head of claim essentially means that, if you found yourself to be on the open labour market in the future and your injuries meant that you would be at a disadvantage to others without injury, it could lead to you having a reduction in your earning ability.

If you qualify for this head of loss, the court can make an award of up to five years’ loss of net earnings. However, this can be as little as six months and is often approximately two years.

Final thoughts

The key to a successful claim for loss of earnings is making sure that you have as much supportive information as possible, such as wage slips, accounts, and medical evidence. For the more complicated claims, this may mean the involvement of a forensic accountant.

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Whether you’re a customer, acting on a customer’s behalf, or just wanting to find out more - check out Minster Law's help and advice. Our frequently asked questions, claims journey, and glossary will get you started.