Can I claim for lost earnings in an injury compensation claim?

If you were injured in an accident that was not your fault, you may be able to claim financial compensation. You should be able to claim for lost earnings, including loss of overtime, pension contributions, and various other work-related losses.

This article looks at what exactly you can claim for and how you can substantiate your losses.

What are the different types of injury compensation?

The legal term for compensation is 'damages', of which there are two types:

General Damages

General damages are awarded for 'pain, suffering, and loss of amenity (PSLA)'.

PSLA is the term for the impact an injury or illness has had and will have, on your life.

General damages compensate you for the direct effects of your injury and are awarded for:

• Physical pain and suffering
• Physical impairment
• Physical disfigurement
• Mental and emotional anguish
• Loss of companionship
• Lessened quality of life

The level of general damages award will depend on the type and severity of your injury, and how the injury affects your life.

General damages awards are calculated according to the Guidelines for the Assessment of General Damages in Personal Injury Cases, Fifteenth Edition by the Judicial College.

See also:

Judicial College Injury Tables 2021

Calculate how much general damages compensation I can claim

Special damages

Special damages are awarded for any financial losses and expenses you have incurred as a result of your injury. Special damages can include:

• Lost earnings (including future earnings)
• Repair and replacement of damaged property
• Medical treatment costs
• Physiotherapy
• Travel costs
• Costs of care
• Costs of adapting your home or car

Making a claim for loss of earnings

Following an injury, you may need to take time off work to recover. For most people, time off work will have financial implications.

When making a personal injury claim, It is possible to recover any loss of earnings as part of a special damages award.

However, you will need to be able to prove that you were justified in taking time off work. Medical evidence will usually be required to support your claim.

You would also be expected to return to work when capable of doing so. As an injured claimant, you must keep any losses to a minimum (mitigate and minimise).

Read more:

How can I 'mitigate and minimise losses' in an injury claim?

How will my loss of earnings be calculated?

Your loss of earnings will be calculated based on your net pay (take-home pay) rather than your pre-tax gross salary or wages.

Your net pay will be calculated pro-rata (for the amount of unpaid time off work) as follows:

Net annual salary + Probable overtime + Bonuses + Commission + Future loss of earnings + Any other work-related losses

Net annual salary

If you are employed, your net annual salary (after-tax) will usually be based on your most recent 3-6 payslips. This would then be annualised and then pro-rata for the amount of time you were off work

Probable overtime

A loss of earnings claim can include loss of overtime. However, you will need to be able to demonstrate that overtime would have been available during the period of absence.

Commission

If you are partly paid on commission you should be able to include this in your claim. You will need to be able to demonstrate, perhaps from historical earnings, what your likely missed commission would have been.

Bonuses

You can also claim for any bonuses that you would otherwise have received (or likely received).

Future loss of earnings

If your injury is more serious, you may still be off work when your claim is settled. Future loss of earnings will be estimated based on the medical prognosis for recovery. If your injury is so serious that you will never be able to return to work, future loss of earnings will be calculated up to the point of probable retirement.

Any other work-related losses

You may also be entitled to…

• Compensation for loss of perks or benefits: If you were working towards a performance-related bonus, but were unable to see it through due to your injuries.
• Compensation for loss of holiday/sick days: If you had to take these as part of your absence, you may be able to claim each day back as a day’s salary.
• Compensation for loss of pension: If your injuries have necessitated a prolonged absence from work to the extent that your pension has been jeopardised.
• Loss of promotion: You may have been due a promotion or had an opportunity to seek promotion. You may find that after your return to work, your ability to do your job and progress to the next level is impaired. You may have lost your confidence, and your career path is compromised as a result.
  
  If it can be established that you might have been promoted and consequently, your earnings potential would have increased, then a case can be made for a higher level of loss.

See also:

Will I have to pay tax on my injury compensation award?

Will there be any deductions?

Maybe. Deductions would then be made for the following:

• Pension contributions (It may still be possible to claim for these losses of contributions separately)
• Sick pay (statutory or paid by your employer)
• Benefits you received whilst off work

How can I prove the amount of income I have lost?

This will depend on whether you are employed or self-employed:

If you are employed, you will need to demonstrate precisely what you earned leading up to the accident for a minimum of six months (usually from payslips).

To support your claim for loss of earnings you should:

• keep all payslips
• Keep a record of all historical overtime worked
• collate and keep any correspondence about overtime, promotions, pay increases etc
• keep a record of all days you were absent from work

Read more:

Are payslips acceptable evidence of loss of earnings in an injury claim?

To assist your solicitor in proving your lost earnings, you should:

• Keep your payslips
• record the days you have been unable to work
• keep details or any work you had scheduled and any purchase or work orders together with a record of the agreed rate you would have been paid
• If your clients are obtained on a more ad-hoc basis, such as driving a taxi, then your losses will be calculated based on past earnings. Keep records of what your daily earnings have been.

What if I am self-employed?

Ascertaining loss of earnings for the self-employed is invariably more complicated. As you will probably not have consistent earnings from week to week, quantifying loss is not as straightforward.

If you are self-employed or own a business, you should notify your accountant as soon as you can that you have to take time off work.

Keep detailed records of the following:

• Any existing contracts you have been unable to complete due to your injuries
• Any work you have been forced to turn away
• Invoices demonstrating current earnings to contrast with the period leading up to the accident.

Ask your accountant to provide accounts for the three-year period preceding your accident, so that any business losses you incur as a result of the injury can be calculated.

Read more:

Can I make a work injury claim if I am self-employed?

What if I am on a Zero-hours contract?

Cases have been successfully brought against ‘quasi-employers’ of people on zero-hours contracts.

Every case is different, but claims can often be brought on the basis of occupiers liability, breaches of health and safety and so on.

Read more:

Can I claim for a work injury on a zero-hours contract?

Will I need medical evidence to support my loss of earnings claim?

If the defendant can demonstrate that you were well enough to have continued working, you will not be compensated for loss of earnings.

In order to demonstrate that you were genuinely unable to work, you will need supporting medical evidence.

When you start a personal injury claim, your solicitor will arrange for you to attend a medical at a local medical assessment. A medical report will then be compiled in support of your case.

You should, however, collate any evidence of medical attention received at the time of the injury as this will help support your claim, such as:

• X-rays
• Your GP’s report
• Results of any tests carried out due to your injuries
• Any other medical records

Calculate my injury compensation

Calculating how much compensation you can claim for an injury can be complicated.

Our injury compensation calculator tells you if you may have a claim, how much compensation you could claim, and what you can claim for.

Find out what your injury claim could be worth now:

What happened?

Claiming compensation depends on the circumstances of your injury. Click the icons below for read more:

Work accidents Public places Road accidents Medical negligence Other accidents

Author:
Howard Willis, Personal injury solicitor

About the author

Howard Willis qualified as a solicitor in 1984 and has specialised in personal injury for over 25 years. He is a member of the Association of Personal Injury Lawyers (APIL) and is a recognised Law Society Personal Injury Panel expert.