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Damages Assessed for 5% Diminished Earning Capacity

Reasons for judgement were published last week by the BC Supreme Court, Vancouver Registry, demonstrating that even a modest level of disability can add up to substantial losses when calculated over working years.

In the recent case (Bhumrah v. McLeary) the Plaintiff was injured in a 2018 collision caused by the Defendant.  The court found the collision resulted in lingering injuries that, while not outright disabling, resulted in a 5% diminished earning capacity.  In assessing damages at $80,000 for future economic loss the Honourable Justice Winteringham provided the following reasons:

[174]     Weighing the different methods of assessment, and the positive and negative contingencies, and taking into account her age, I consider Ms. Bhumrah will be able to work at approximately 95% full-time capacity once she enters the workforce as a psychiatric nurse after her education completes. In my view, based on the evidence presented, the reduced workload should take her through to the age of retirement of 65 years old. There was no evidence from Ms. Bhumrah that she intended to work past the usual age of retirement.

[175]     In reaching this conclusion, I have taken into account the positive and negative contingencies, including treatment prospects from physiotherapy. I thus consider a reasonable assessment of Ms. Bhumrah’s loss of earning capacity (based the capital asset table provided by counsel and based on 30 years of employment starting at approximately $69,000 per year less her residual working capacity of 95% and taking into account the present value multiplier) to be approximately $83,195.

[176]     As stated previously, counsel advanced a submission that Ms. Bhumrah was disabled by 30%. I do not find that this level of disability is supported by the medical evidence. Ms. Bhumrah has never worked as a psychiatric nurse and is not anticipated to enter the workforce until 2022. Based on my findings that Ms. Bhumrah is motivated, is prepared to engage with treatment, is not yet three years post accident and allowing for additional improvement with her condition, in my view 5% fairly and accurately reflects the totality of the evidence about functional capacity and takes into account any limitations.

[177]     Ms. Bhumrah’s employment future is unknown, in part, because she has yet to begin her employment as a psychiatric nurse. I have tried to address the uncertainty as best as I am able and have structured the assessment accordingly.

[178]     My consideration of these figures takes into account the positive contingency that she would enter the workforce as a psychiatric nurse in 2022 with slight modification to allow for any physical limitations at about 95% capacity, with the anticipated earning increases over her professional life, along with the negative contingencies I have identified above. Applying the economic multiplier identified, which includes labour market contingencies, the present value of this loss is approximately $83,195. This does not take into account time out of the workforce but rather, it is based on working at about 95% capacity to retirement at a position similar to that of the reported salary for psychiatric nurses. As a round estimate, I assess Ms. Bhumrah’s loss of future earning capacity to be $80,000.

[179]     In my view, this assessment fairly takes into account the real possibility that because of her injuries, Ms. Bhumrah will need to reduce her hours of work with a resultant loss in salary and pension benefits. This assessment also takes into account the counter-possibility that she will maintain full-time hours in a position that does not require the physical component identified by the experts to be the basis for their opinion limiting her employment. In my view, $80,000 takes into account these competing contingencies.

Bhumrah v. McLeary, diminished earning capacity, Justice Winteringham