Will a personal injury claim compensate me for lost earnings?
If you have been injured in an accident that was not your fault, you may be able to seek financial compensation – but will this include loss of earnings?
Two types of compensation
Personal injury compensation is divided into 2 parts:
- General damages - are awarded for any pain, suffering and loss of amenity suffered by the Claimant
- Special damages - can include any financial losses or costs incurred, such as prescriptions and whiplash physiotherapy, ongoing care costs and loss of earnings.
- What are general and special damages in an injury claim?
- How much compensation can I claim?
- Do I have a claim?
Claiming loss of earnings
Following an injury it is very common to need time off work to recover. For most people this will have financial implications through loss of earnings.
It is possible to recover any loss of earnings as part of a special damages award.
You will need to be able to prove that you were justified in taking time off work. Medical evidence may be required to support any claim.
Be aware that you would be expected to return to work when capable of doing so. As an injured claimant you do have a duty to keep any losses to a minimum.
How is loss of earnings calculated
Loss of earnings will be calculate based on your Net (take home) pay rather than te pre-tax gross.
Net pay will be calculated as your gross salary + probable overtime for the period less:
- pension contribution (It may be still be possible to claim for these loss of contributions separately)
- sick pay - statutory or paid by your employer
- any benefits you receive whilst off work
If you would have received any bonuses, commission or other payments during the time off work, these will be factored into the claim.
How can I prove what earnings I have lost?
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
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 straight forward.
To assist your solicitor in establishing your losses:
- 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 about loss overtime?
A loss of earnings claim can include loss of overtime. However you will need to be able to be able demonstrate that overtime would have been available during the period of absence.
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.
What about loss of future earnings?
If the injury is more serious you may still be off work at the point your claim is settled.
If this is the case then your future loss of earnings will be estimated with reference to the medical prognosis for recovery.
If the injury is so serious that you will never be able to return to work, then the loss of earnings will be calculated based on when you would have been likely to retire.
I lost out on a promotion
Time off work following an accident can cost you more than loss of earnings. 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 greater level of loss.