Loss of Earning Capacity Studies

RPC provides analysis of loss of earning capacity in personal injury cases and damages in wrongful death cases. To calculate these losses, we gather available personal information, current government statistics and research, and income and benefit trends in relevant jobs. When the injured party is a business owner and the business is impacted, we provide a careful analysis of accounting records and a projection of lost profits. We consider differences between earning capacity and historical earnings. The analysis separately considers probabilities of survival, probability of being able to work and probability of employment.

RPC has dealt with a wide variety of occupations, including laborers, physicians, helicopter pilots, miners, waitresses, missionaries, astronauts, and computer programmers. Following are a few examples:

• To accurately estimate the earnings of a waitress at the time of her death, RPC researched the trends of under-reporting tip income so that we could accurately estimate earnings at the time of her death and projected earnings if she had lived.
• In a wrongful death case of an American missionary living and working in Mexico with his wife and two children, RPC considered many factors when determining loss of earning capacity. These factors included comparing the lower cost of living in Mexico to purchasing power in the United States, since his family returned to the U.S. after his death; and the cost of benefits, such as housing and children’s schooling, which were provided in Mexico. Since the man intended to become a minister in the United States, we also had to consider special tax benefits available to clergy and tax laws regarding foreign income earnings. We interviewed the man’s missionary board to determine future pay increases due to tenure on job and cost of living adjustments, as well as specific employee benefits.
• Determining a physician’s solo practice loss of earnings following his wrongful death required analysis of both personal and corporate tax returns and various sources for physician income growth projections, including Medical Group Management statistics, Bureau of Labor Statistics CPI growth, and Bureau of Labor Statistics change in median weekly physician wage. We also analyzed consumption patterns of a high-income individual, researched the value of the sale of physician practice, assuming that would have occurred at his retirement. RPC also projected asset accumulation, considering projected practice income and Social Security income after retirement net of tax and consumption.
• RPC analyzed the loss of earning capacity of a young woman who lost her arm in a car accident. We did vocational analysis, life care plan, and lost earnings capacity. We surprisingly found that she didn’t have a loss of earning capacity due to the loss of her arm. She was in a field that did not physically require an arm, and our extensive research on amputees and lost earnings concluded that “average” statistics on this issue did not apply. While some jobs might not be open to her, many others did fit her capabilities and interests.