BC Court of Appeal Discusses Future Wage Loss in Personal Injury Claims

Reasons for judgement were released today by the BC Court of Appeal increasing the award a Plaintiff received at trial for Diminished Earning Capacity (future wage loss).
In today’s case (Pett v. Pett) the Plaintiff sustained serious injuries in a 2003 BC motor vehicle collision.  The findings of fact made by the trial judge giving rise to the appeal were as follows:
[1] The appellant, Jacob Pett, now aged 23, was injured in a motor vehicle accident that occurred on a logging road near Rock Creek, British Columbia, on November 15, 2003.  He was a passenger in a pick-up truck being driven by his father, the defendant, David Pett.  The driver lost control and the vehicle slid off the road and rolled over a number of times before coming to rest in a farm field.  The appellant initially suffered from a concussion and an injured shoulder, but recovered satisfactorily from these injuries.  He complained of a very painful back shortly after the accident.  This back injury persists and continued to cause him difficulty at the time of trial…
[5] The judge found that the back injury had a negative impact on his recreational activities and that his enjoyment of those activities had been and will be diminished because of his back pain.  The judge awarded the appellant $85,000 for non-pecuniary damages.  He assessed damages for income loss between the date of the accident and the date of trial at $23,000.  The judge awarded the appellant the sum of $120,000 as damages for future loss.  It is this particular award that has led to the present appeal.  The appellant asserts that the amount awarded for future loss was unreasonably low.  The respondent submits it was an adequate award and says that if anything the award may have been on the generous side.
The BC Court of Appeal agreed with the Plaintiff that the damages for future wage loss were low given the findings of fact made by the trial judge.  In increasing the future wage loss award to $225,000 the Court summarized and applied the law of future wage loss as follows:

[18] In the recent case of Lines v. W & D Logging Co. Ltd., 2009 BCCA 106, Saunders J.A. said this:

[57]      There are two major components to an assessment of loss of future earning capacity.  One is the general level of earnings thought by the trial judge to be realistically achievable by the plaintiff but for the accident, taking into account the plaintiff’s intentions and factors that weigh both in favour of and against that achievement, and the other is the projection of that earning level to the plaintiff’s working life, taking into account the positive and negative vagaries of life.  From these two major components must be applied an analysis that produces a present value of the loss, adjusted for all appropriate contingencies.

[19] I think this to be a helpful framework for a court to follow in fixing a measure of damages for future loss.  Some cases speak of the loss of a capital asset and some of the loss of future earnings, but the essential matter that engages the attention of a court making an assessment in this area is to endeavour to quantify the financial harm accruing to the plaintiff over the course of his or her working career.

[20] In the case at bar, the trial judge said this in making his award for future loss:

[79]      Given the significant negative contingencies present here however, I am not satisfied that the award under this head of damages should be as high as suggested by plaintiff’s counsel.  I note that he is currently working alongside his father and being paid the same hourly rate.  He does, however, work fewer hours, partly in response to his lower back pain.  In all of the circumstances, I assess his loss of future earning capacity at $120,000.

[21] While there is unquestionably a measure of uncertainty about what the future holds for a person in the position of this appellant with a long working life ahead of him, the judge did not explain what he considered in arriving at that figure.  Particular contingencies are not identified and, perhaps more significantly, there is virtually no reference to the figures put forward by the parties’ experts, aside from a reference to some figure suggested by appellant’s counsel, presumably the $470,000 figure aforementioned.  The task of this Court in deciding on the adequacy of the award for future loss is made difficult because we are left with little to demonstrate how the figure of $120,000 was assessed as an appropriate damages award under this head by the trial judge.  Having regard to the evidence before the judge, particularly the reports of the two economic experts, the award appears to me to be unduly modest.

[22] I have considered whether the case might be remitted to the Supreme Court to deal with this issue in a more satisfactory fashion.  The appellant urged us, if we considered the award of damages inadequate, to set a figure.  It was submitted that considerations of cost and timing would support such an approach.  While this Court is usually reluctant to embark upon its own assessment of what is an appropriate figure for damages, I consider that this case calls for that treatment.  I reach this conclusion because there were no particular live issues of credibility in the instant case and the judge was of the view that he should generally accept the view of the medical experts called by the appellant.  We have the evidence of Messrs. McKellar and Gosling before us.  I consider it would not be appropriate to refer this matter back to the trial court for a new assessment having regard to the amounts involved and the additional delay and expense that would be occasioned.

[23] It seems to me that the figure adumbrated by Mr. Gosling, approximately $300,000, is a useful starting point for an analysis of the loss suffered by the appellant under this head.  Although the earnings history of the appellant did not indicate that he had a history of earnings at around $32,000, which was a statistical figure used by the experts for a person with slightly better educational qualifications, it must be borne in mind that the appellant was just starting out and his historic earnings reflected the situation when he was just entering his twenties.  The level of income referred to by the experts seems to me to be not unrealistic.  A person in the occupation of the appellant with his work ethic should be able to achieve such earnings.  He apparently expected to earn perhaps something over $35,000 in the period immediately preceding the trial.  Of course, his ability to continue to earn at such a level is thrown in doubt by the medical opinions accepted by the judge.  The substantial difference between the experts as to expected loss in future income appeared to relate to their differing treatment of labour market contingencies.  Mr. Gosling essentially took a more pessimistic view concerning labour market contingencies than did Mr. McKellar.

[24] In this case, I consider the approach of Mr. Gosling to be preferable because of the very long span of time left in the expected working life of the appellant.  The length of time to be considered in my view mandates a fairly conservative approach to any prediction of future loss.  However, I do not perceive, as I noted, how the judge arrived at the figure he did.  I view as erroneous his treatment of the educational level of the appellant.  Perhaps this led him to very heavily discount the loss predictions.  I consider that, if one utilizes the approach suggested by Mr. Gosling as a helpful starting point, having regard to the facts in this case, a reduction of the magnitude reflected in the award of $120,000 under this head is not justified.  I think it is significant that this appellant has a very good work ethic and there was and is wide scope for employment opportunities in the construction field through the extended family of the appellant.  Opportunities for advancement in, and indeed continuation by the appellant in this field of endeavour are now considerably attenuated as a result of the accident.  The appellant’s back problem is likely to persist, based on the medical evidence, and there is a very real narrowing of future opportunities for him.  Thus, this injury appears very likely to result in a diminution of career options and, consequently, a long term earnings impairment.

[25] The work ethic of the appellant has to be taken account of in an assessment of a proper figure for future loss.  His positive work ethic suggests that, but for the accident, the appellant might have looked forward to earning more than the statistical average figures posited by the experts.  Thus, one could suggest his loss could be greater over his future earning years than suggested by the statistical figures.  His attitude to work, however, also means that he may in fact do better than expected in future despite his injury because he will not be as affected as might be the case with a person with a less robust work ethic.  This consideration would suggest a lesser loss than the statistical figures relied upon by the experts.  While the defendant tortfeasor must take the appellant as he finds him concerning educational level, he also in this case gets the benefit of a plaintiff with a positive work attitude.  These factors are to be taken account of and balanced in arriving at a fair assessment of damages for future loss.  Doing the best I can with the evidence and adopting a cautious approach because of the long time span, I am of the view that some discount from the amount resulting from the approach of Mr. Gosling would result in an appropriate award under his head of damages.  A discount ranging around $75,000 to $80,000 seems to me justifiable because of the work ethic of the appellant.  This yields a figure of about $225,000 for future loss and this is the amount I would substitute for the figure set by the trial judge.  I would accordingly allow the appeal in these terms and award the sum of $225,000 under the head of future loss.

bc personal injury claims, diminished earninng capacity, future wage loss, ICBC claims, pett v. pett

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ERIK
MAGRAKEN

Personal Injury Lawyer

When not writing the BC Injury Law Blog, Erik is the managing partner at MacIsaac & Company, based in Victoria, B.C. He is also involved with combative sports regulatory issues and authors the Combat Sports Law Blog.

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