Lost earning capacity economist expert lawyer

Lost earning capacity is not lost wages. Lost wages are the pay cheques you missed. Lost earning capacity is the difference between what you could have earned across a working lifetime and what you can earn now — and in a serious injury it is frequently the largest component of the claim and the one most often under-developed. Law Offices Of SRIS, P.C. handles catastrophic injury claims in Virginia, Maryland, the District of Columbia, New Jersey and New York.

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What has to be established

Three things in sequence. Medical restrictions: what the treating physicians say the person can and cannot do, stated as functional limitations rather than diagnoses. Vocational assessment: given those restrictions together with the person’s age, education, skills and work history, what occupations remain realistically available and at what earnings. Economic analysis: the difference between the pre-injury and post-injury earnings paths across the remaining working life, adjusted for growth, fringe benefits and retirement contributions, then reduced to present value.

Why it applies even to people still working

A person can return to their job and still have lost earning capacity — where they can no longer perform the overtime that formed part of their income, where the progression they could have expected is now closed, where they are less resilient to job loss because fewer roles are open to them, or where they will retire earlier than they otherwise would. Present earnings are evidence, not the answer.

The categories that get missed

Fringe benefits, which are a substantial part of total compensation and are lost with the job rather than with the salary alone. Retirement and pension contributions, both employer and employee, and their compounding across decades. Overtime and shift premiums where they were consistent. Career progression that was documented and realistic. Household services the person can no longer perform, which have an economic value even though nobody was paying for them.

How carriers attack this component

By treating current earnings as the measure. By arguing the person could retrain into sedentary work without evidence that such work is available to them at comparable pay. By disputing the pre-injury earnings path as speculative, particularly for young people and the self-employed. By disputing the work-life expectancy and the discount rate. And by pointing to any period of continued employment as proof that capacity is unimpaired.

Building it properly

Obtain written functional restrictions from the treating physicians rather than a diagnosis. Commission a vocational assessment rather than asserting what work is available. Gather the full earnings record including benefits, retirement contributions and overtime history. Where the person is young or self-employed, gather the evidence that establishes the trajectory — education, training, industry data, business records. Then have an economist do the analysis. Each step depends on the one before it.

Available insurance coverage

What can be recovered is limited by what coverage exists. The at-fault party’s policy is the starting point, but it is frequently not the only source: the injured person’s own uninsured and underinsured motorist coverage, household policies, employer coverage where a vehicle was used for work, umbrella and excess layers, and the coverage of any additional responsible party can all apply. Underinsured coverage typically requires notice and consent before any settlement with the at-fault party — settling first can forfeit it. Identifying every available layer is early work, not closing work.

How damages are categorised and proven

Damages are not a single number that gets negotiated. They are separate categories, each proven by different evidence. Past medical expense is proven by billing records and the reasonableness of the charges. Future medical expense requires a physician’s opinion that the care is reasonably certain to be needed. Lost income is proven by employment and tax records; lost earning capacity is a different and larger question requiring vocational and economic analysis. Non-economic loss — pain, limitation, and the effect on daily life — is proven through the medical record and through testimony from people who can describe specific changes rather than general decline. No one can responsibly tell you what a case is worth before that evidence exists, and any figure offered at the outset is a guess.

Filing deadlines

Every injury claim is governed by a statute of limitations, and the periods differ by state and by claim type. For personal injury actions the period is two years in Virginia under Va. Code § 8.01-243(A), accruing at the date of injury; three years in Maryland under Md. Code, Cts. & Jud. Proc. § 5-101; three years in the District of Columbia under D.C. Code § 12-301(8); two years in New Jersey under N.J.S.A. 2A:14-2; and three years in New York under N.Y. C.P.L.R. § 214(5). These are general periods. Discovery rules, tolling for minors and incapacity, claims against government entities — the District imposes a six-month notice-of-claim requirement for claims against the District government — and claim-specific statutes can shorten or extend them. Do not rely on a general period for your own case; have the deadline confirmed on your facts.

Frequently Asked Questions

What is the difference between lost wages and lost earning capacity?

Lost wages are the specific income you actually missed, proven with pay records. Lost earning capacity is the reduction in your ability to earn over your remaining working life. The second is usually far larger in a serious injury and requires vocational and economic evidence rather than arithmetic on pay stubs.

I went back to work. Do I still have a claim for this?

Possibly. Capacity can be reduced even where current earnings are unchanged — if overtime is no longer possible, if promotion paths are closed, if you are more vulnerable to job loss because fewer roles suit your restrictions, or if you will now retire earlier. Present earnings are one piece of evidence rather than the conclusion.

How is it calculated for someone young with no earnings history?

Through evidence of the path that was realistically available — education, training, aptitude, family and industry patterns, and statistical earnings data for the relevant occupation and education level. It is a substantial evidentiary exercise rather than arithmetic, and it is contested precisely because there is no pay record to point to.

What about my pension and benefits?

They belong in the calculation. Employer-provided health coverage, retirement contributions and other benefits form a substantial part of total compensation and are lost with the job rather than with the salary alone. Retirement contributions in particular compound over decades, so omitting them significantly understates the loss.

What is a vocational evaluation?

An assessment by a qualified professional of what work you can realistically perform given your medical restrictions, age, education, skills and work history, and what those occupations pay in your actual labour market. It converts a physician’s restrictions into an employment reality, and without it the economic analysis has no foundation.

Do household services count?

They can. Tasks you performed for your household and can no longer do — maintenance, childcare, yard work, driving — have an economic value even though nobody was paying you for them. It is a recognized component that is frequently overlooked and it requires documentation of what you actually did before.

What is work-life expectancy?

The projected remaining years of working life, accounting for participation rates and the likelihood of remaining in the workforce. It is a contested input, because a shorter projection reduces the loss. Where the injury itself will cause earlier retirement, that should be addressed by the vocational evidence rather than assumed.

How long do I have to bring a claim?

Two years in Virginia and New Jersey, three years in Maryland, the District of Columbia and New York for personal injury actions, subject to tolling and to shorter notice requirements where a government entity is involved. Because vocational and economic evidence takes time to assemble, begin well before the deadline.

About Mr. Sris

Mr. Sris is the owner and founder of Law Offices Of SRIS, P.C., which has practiced since 1997. He is a former prosecutor and is admitted in Virginia, Maryland, the District of Columbia, New Jersey and New York. Of Counsel attorneys contract directly with the firm and handle matters alongside him. In 2019 Mr. Sris testified before the Virginia House Courts of Justice Committee on House Bill 635.

Speak with Mr. Sris

Injury claims are governed by filing deadlines that vary by state and by claim type, and evidence degrades quickly. Request a consultation. Reach our location at (888) 437-7747. Consultations are by appointment.

Last reviewed: August 22, 2026.

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