Mathematical Aids Should Not Be Ignored When Assessing Diminished Earning Capacity

Reasons for judgement were released today by the BC Court of Appeal addressing the proper role of mathematical evidence in assessing damages for diminished earning capacity.
In today’s case (Jurczak v. Mauro) the Plaintiff was injured in a motor vehicle collision.  The Plaintiff was awarded $110,000 in past wage loss at the time of trial for a period that spanned over 6 years.  The Court awarded a figure modestly above this for future losses despite findings that the Plaintiff would be limited for the duration of her working career, some 20 more years.  The Plaintiff appealed arguing the trial assessment was inordinately low.  The BC Court of Appeal agreed and substituted a substantially greater figure.  In addressing the proper role of mathematical/statistical evidence in diminished capacity assessments the BC Court of Appeal provided the following reasons:
[36]        This process is “an assessment rather than a calculation” and “many different contingencies must be reflected in such an award”: Barnes v. Richardson, 2010 BCCA 116 at para. 18. “Ultimately, the court must base its decision on what is reasonable in all of the circumstances. Projections, calculations and formulas are only useful to the extent that they help determine what is fair and reasonable”: Parypa v. Wickware, supra, at para. 70.
[37]        With that said, if there are mathematical aids that may be of some assistance, the court should start its analysis by considering them. For example, in Henry v. Zenith (1993), 31 B.C.A.C. 223 at paras. 44-48, 82 B.C.L.R. (2d) 186 (C.A.), this Court held that a trial judge’s failure to consider an economist’s projections of a plaintiff’s lost future earning capacity contributed to the judge committing an error in principle, which “resulted in a wholly erroneous estimate of the damages”.
[38]        In cases where the future is hard to predict, a global approach to assessing the loss of future earning capacity is preferable. However, in this case, given the trial judge’s findings of fact, the future is not hard to predict. Ms. Jurczak intended to become a DIR consultant prior to her injuries and because of those injuries she can only work 15 hours per week. The trial judge found as fact that if she was physically able to work 23 hours per week, there was sufficient demand for her skills that she would be able to bill for those hours.
[39]        Additionally, the award for loss of future earning capacity is supposed to compensate Ms. Jurczak for the next 20 to 22 years but is only $10,000 higher than the award for past wage loss.
[40]        In my view, there is a reversible error in the trial judge’s assessment of future loss of capacity. The trial judge’s award bears no correlation to the award for past income loss; nor does it accord with the trial judge’s findings regarding the effect of her injuries on her future ability to work
[41]        Ms. Jurczak does not dispute the trial judge’s findings of fact. Rather, she maintains the trial judge offered no explanation as to why he departed so significantly from the findings in the economist’s report, which he appeared to accept as credible and reliable. Her argument is premised on the assumption the trial judge pulled the figure of $120,000 out of thin air, without having regard to the economist’s calculations.
[42]        It is obvious from the trial judge’s analysis and reasoning that he rejected a purely mathematical approach to calculate Ms. Jurczak’s loss of a capital asset. Instead, it appears he followed the approach in Brown v. Golaiy and awarded Ms. Jurczak $120,000. While the award represents two to three times Ms. Jurczak’s average earnings before the accident and almost double her annual earnings afterwards, the amount has no foundation in the evidence.
[43]        The trial judge was entitled to reject a mathematical approach in the circumstances of this case. However, given his factual findings, in my view the award for loss of future earning capacity is so inordinately low as to amount to an error.
[44]        Having regard to the award for loss of future earning capacity or $110,000 representing a 6 year loss, and considering Ms. Jurczak has about 20-22 years to age 65 and possible retirement, I would increase the award for loss of future earning capacity to $400,000.