A decision released last week by the British Columbia Court of Appeal provides further guidance with respect to the manner in which to assess damages for loss of future earning capacity.
From my experience, loss of future earning capacity is often an issue that can be particularly difficult to resolve when trying to settle a case with an insurer. ICBC, in particular, has initiated a number of appeals in recent years seeking to reduce awards for loss of earning capacity made by our trial courts. In many of these cases, the trial involved a claim by a young person who yet to establish a consistent pattern of employment from which the court could assess future income loss. In this most recent case, Crimeni v. Chandra, 2015 BCCA 131, ICBC sought to appeal an award made to a young woman who had been in two accidents - the first when she was 17 years old and the second, when she was in her fourth year of university. By the time of trial, the young woman was in law school.
At trial, the injured young woman sought a damages award based on her loss of earning capacity given that her injuries had prevented her from qualifying for medical school. This was not accepted by the trial judge, who concluded there was not a real or substantial possibility that the plaintiff's injuries prevented her from pursuing a medical career. However, the trial judge did award damages on the basis of future income loss concluding that the young woman had demonstrated a loss of future earning capacity in her future career as a lawyer.
The damages award at trial was $372,960, which reflected a 20% reduction in the young woman's lifetime earning capacity as compared to females with law degrees entering the work force in 2015.
On appeal, ICBC argued that the future earning capacity award was excessive and wholly erroneous. The Court of Appeal concluded that ICBC was, in effect, arguing that an error was made by the trial judge because the award for future loss of earning capacity was simply "too large". Keeping in mind the limited scope of review of such matters on appeal, the Court of Appeal concluded that an award for future earning capacity can only be said to be in error if the damages amount could not "have been arrived at on any reasonable view of the evidence".
What I found interesting about the decision were some of the arguments that were raised by ICBC on the appeal. First, ICBC argued that the figures from the economist presented inflated income, because the data included all people with law degrees, as opposed to only those who practice as lawyers. The Court of Appeal did not accept this proposition, as it was not put to the expert economist during trial.
Similarly, ICBC argued that the income figures presented by the economist should not have included an additional amount to account for non-salaried benefits. Again, the Court of Appeal rejected this submission as it was not put to the economist at trial. Further, ICBC argued that the trial judge's reliance on female (as opposed to male) income statistics was not a conservative view, as there is no evidence that there is any legitimate gap between male and female lawyers' incomes.
To be clear, the trial judge accepted the female statistics as being "conservative" in the circumstances. This was an interesting argument made by ICBC, because plaintiff counsel often argue, when dealing with a female client, that male earning statistics should be used to assess damages because the historic female statistics incorporate gender bias. In a sense, ICBC was arguing the opposite point in this appeal.
Ultimately, the Court of Appeal concluded that it was not an error for a trial judge to recognize the bias in historical data and to have selected the female statistics as being a conservative estimate.
There are different methods for counsel to present their client's claim for loss of future earnings. In this case, it appears that the plaintiff opted to present average statistical information for individuals who were to attain the same level of education. The plaintiff in this case had managed to make her way to law school. However, as she had yet to graduate, the "crystal ball" exercise with respect to assessing the impact of her injuries on her future earning capacity had to be undertaken on the basis of statistical evidence provided by an economist.