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Loss of Earning Capacity in the “Better than Before” Client


            Proving loss of earning capacity can be troublesome, particularly when the client has a partial permanent injury, but makes more money after the accident than before, and is able to function at work, home, and play without any apparent disability.  These include injuries such as partial loss of peripheral vision, loss of one kidney, scars, loss of spleen, etc.

While these injuries are permanent, the injured client can continue to function at full capacity in his/her vocation.  Damages for loss of earning capacity are much more difficult to prove in these types of cases because

quantifying the loss is difficult, and juries tend to believe that your client will not suffer any loss of future earning capacity from the injury.

To dispel this belief, counsel must be able to prove to the jury that although the injured client returned to work, the injury will still have a profound effect on the client’s future earning capacity.  This burden can be problematic in the “better than before” client.  However, don’t lose sight of the fact that the stage has already been set when jurors hear evidence of permanent injury.

Jurors understand that permanent injuries carry with them a presumption of worry, stress, mental anguish, pain, and other “noneconomic” attributes that will likely have an impact on an injured person’s performance and work well into the future.  For example, the client who lost a kidney because of an accident and whose job requires physical labor, may function fine at work, but will always be cautious because of worry about injuring his one remaining kidney.


              With this in mind, counsel can take the next step by showing the jury that these “noneconomic” attributes, as well as the nature of the injury itself, do in fact cause a loss of earning capacity – notwithstanding the fact that the client looks fine, feels fine, is doing great at work, and even received a raise.  How do you capitalize on the injury and meet the burden?  Surprisingly, one of the best tools has been around for a long time.

The U.S. Department of Veterans Affairs adopted a Schedule of Rating disabilities in 1919, under what is now 38 U.S.C. 15538 CFR Section 4.10 describes its purpose:

“This rating schedule is primarily a guide in the evaluation of disability resulting from all types of diseases and injuries . . . The percentage ratings represent as far as can practicably be determined the average impairment in earning capacity resulting from diseases and injuries and their residual conditions in civil occupations.” [38 CFR 4.10 (1994)]

The VA Schedule is complicated.  It contains detailed anatomical data and other criteria.  The schedule translates specific injuries or consequence of injuries into a percentage reduction in earning capacity.

Since the VA Schedule is a recognized tool for estimating a loss of work-place earning capacity and it has been used for over 75 years to estimate and set compensation in civil occupations, there should be no problem with its evidentiary use.  The VA Schedule should easily meet the relevancy and reliability foundations for evidentiary use at trial, as well as provide a recognized and authoritative basis for an expert’s calculation of loss of earning capacity.

Additionally, the fact that the VA Schedule is a guide promulgated and used by the U.S. government lends considerable credibility to its use in the jury’s eyes as an authoritative tool for calculating loss of earning capacity in the workplace.


            Utilizing the VA schedule to estimate a loss of earning capacity is a three-step process.  The first step is to establish the medical foundation for each injury.  The statute, 38 CFR §4.10 (1994), specifically provides that accurate and fully descriptive medical examinations are required in order for the schedule to apply.

Accordingly, a medical foundation must be established for each injury.  A meeting with the injured client’s treating physician and a letter setting forth the client’s pre-injury and post-injury medical condition with an emphasis on the permanency of any injury and the future consequences of the present injury will establish the medical foundation.

The statute at 38 CFR Part 4, Appendix B – Numerical Index of Disabilities provides a list of the various disabilities covered in the VA Schedule.  A review of the listed disabilities will help direct counsel to the specific provisions of the code which can then be provided to the treating physician to address in his report.  If the treating physician is unwilling to assist in the process, counsel can hire an independent medical expert and provide the expert with the records and applicable provisions for direction in performing a review and preparing a report.

The second step is to furnish the medical report and employee wage information to an economist familiar with the VA Schedule.  Most economists are familiar with the VA Schedule and if they are not, the statute is self-explanatory and fairly easy to understand.  The applicable economic principles are very similar if not identical to those used to perform all other calculations for economic loss.  With this information, the economist can then calculate the loss of future earning capacity.

The VA Schedule is a valuable tool in the plaintiff’s arsenal.  When presented through expert testimony, the schedule provides probative evidence of a injured person’s diminution of earning capacity, because it is relevant, reliable, material and authoritative.  Providing detailed information regarding the extent of a plaintiff’s economic injuries will almost always result in more adequate awards for future damages due to a partial loss of earning capacity – one more tool to help counsel maximize damages for clients.


            Learned Treatises:  Video is admissible under Federal Rules. (Constantino v. Herzog, 203 F.3d 164, 2nd Cir. 2000).

Causation and Prognosis:  It is at the essence of all negligence cases, and it is the core issue of all medical malpractice cases.  Beware of speculative opinions – will result in dismissal.  Do opinions such as “might have been caused”, “likely”, “could have”, “could be”, “Possibly was”, “probably was”, “possible cause”, meet the test of acceptability?  Answer:  Yes.  See Mattot v. Ward, 48 N.Y.2d 455, 423 N.Y.S.2d 645 (1979).  Caveat:  Though no combination of “magical words represented by the phrase ‘reasonable degree of medical certainty’ is required, you must convey, in the totality of the opinion an assurance that the opinion is not based on speculation.


“Any party may move for judgment with respect to a cause of action or issue upon the ground that the moving party is entitled to judgment as a matter of law, after the close of the evidence presented by an opposing party with respect to such cause of action or issue, or at any time on the basis of admissions.  Grounds for the motion shall be specified.  The motion does not waive the right to trial by jury or to present further evidence even where it is made by all parties.”

A party’s failure to make a pre-verdict motion under CPLR Rule 4401 for judgment as a matter of law is deemed to be a concession that the evidence presented a question of fact for the jury. Hurley v. Camitolo, 239 A.D.2d 559, 658 N.Y.S.2d 90 (2d Dep’t 1997).  In Miller v. Miller, 68 N.Y.2d 871, 508 N.Y.S.2d 418 (1986), a personal injury action, the Court of Appeals reversed the Appellate Division because of Plaintiff’s failure to make a motion for a directed verdict under CPLR Rule 4401. In Miller, supra, the jury returned a verdict against the Plaintiff on the issue of whether the injuries were “serious”.  On appeal, the Appellate Division reversed, holding that as a matter of law the Plaintiff’s proof was sufficient to show “serious injury”.  This decision in turn was reversed by the Court of Appeals because “By failing to move for a directed verdict on the question whether plaintiff has sustained ‘serious injury’… plaintiff conceded the question to be one for the jury.” Miller, at 873.

Preservation/Making a Record:  CPLR §5501(a) provides that an appeal from a final judgment brings up for review:

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  1. any ruling to which the appellant objected or had no opportunity to object or which was a refusal or failure to act as requested by the appellant and any charge to the jury, or refusal to charge as requested by the appellant to which he objected;
  2. any remark made by the judge to which the appellant objected;

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But unless you have done as required by CPLR §4017 you have effectively lost your appeal.

            CPLR §4017 provides that:

“Formal exceptions to the rulings of the court are unnecessary.  At the time a ruling or order of the court is requested or made, a party shall make known the action which he requests the court to take or, if he has not already indicated it, his objection to the action of the court.  Failure to so make known objections, as prescribed in this section or in section 4110-b, may restrict review upon appeal in accordance with paragraphs three and four of subdivision (a) of section 5501.”

In this context, it is critical that you take exception to erroneous charges to the jury, otherwise realizing the error after judgment is unavailing.

[1] Excerpted from ATLA Newsletter Article, Summer 2006, by James R. Howell

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