Reasons for judgment were published this week by the BC Supreme Court, Vancouver Registry, assessing damages for largely recovered but lingering soft tissue injuries and chronic pain following a collision.
In the recent case (Bhumrah v. McLeary) the Plaintiff was injured in a collision caused by the Defendant. The Defendant accepted fault for the rear end crash. The collisions resulted in soft tissue injuries. Despite enjoying “80-90%” recovery the Plaintiff had lingering chronic pain and depression secondary to these injuries. The injuries were “expected to continue, to some degree, into the future as well. “.
The Plaintiff was employed as commercial transport mechanic. He missed considerable time from work but eventually was able to return. Despite this there was evidence that the lingering injuries were not particularly compatible with work of this physicality. In assessing damages for diminished earning capacity at $92,000 Madam Justice McDonald provided the following reasons:
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:
Just because a Plaintiff suffers no past loss of income does not preclude a court from awarding damages for diminished future earning capacity. Reasons for judgement were published this week by the BC Supreme Court, Vancouver Registry, demonstrating this.
In today’s case (Grant v. Ditmarsia Holdings Ltd) the Plaintiff was injured in a 2015 collisions that the Defendants admitted fault for.
The crash caused chronic physical and psychological injuries. The Plaintiff was “a hardworking journeyman plumber” and despite his injuries, which had a poor prognosis for full recovery, continued to work and increased his earnings in the years following the crash. Despite this he expressed concern that in the long term his stoicicism could not continue indefinitely and the injuries would eventually negatively impact his earnings. The Court agreed. In assessing damages at $325,000 for future diminished earning capacity Madam Justice Wilkinson provided the following reasons:
Reasons for judgement were published today by the BC Court of Appeal confirming it was not an error in law for a trial judge to rely on male labour market contingencies when assessing damages for an injured female plaintiff.
Reasons for judgement were released this week by the BC Court of Appeal upholding an award for diminished earning capacity based on “common sense“.
In the recent case (Ali v. Glover) the Plaintiff was involved in two collisions and suffered chronic aggravation of degenerative issues in his neck and back. The Plaintiff was able to continue working with his long-standing employer although some accommodations were made for limitations his injuries caused. At trial the Court awarded $110,000 for diminished earning capacity on the basis that the Plaintiff’s injuries were permanent and very well could impact earning capacity in the future should he lose his present employment.
ICBC appealed arguing this award was rooted in speculation. The BC Court of Appeal disagree noting it is simply a matter of common sense. In upholding the assessment the Court provided the following reasons: [19] Mr. Ali’s case for damages for a loss in his earning capacity was based on the injury to his back precluding him from finding employment that would otherwise be available to him should the need arise. The company for which he has worked for over 20 years has made adjustments to accommodate his limitations such that he does not do much of the “heavy lifting” that he once did, but for one reason or another his employment may be reduced in terms of the work available that he can do or be terminated altogether. His loss is essentially one of a capital asset in that, because of his injury, he is less capable of earning income from all types of employment, less marketable, less able to take advantage of all employment opportunities which, save for his injury, may have been available to him, and less valuable to himself as an income earner, all as discussed in Brown v. Golaiy (1985), 26 B.C.L.R. (3d) 353 (S.C.). The judge concluded: [157] I am satisfied the plaintiff has proven there is a real and substantial possibility of loss of income earning capacity in the future. He has an accommodating employer but she may retire and sell or reduce his wage to one commensurate with the hours he is working on set up and supervising and not allow him to draw on a dwindling overtime bank. If he loses his job he is less valuable to himself and potential employers because he is not fully able to do physical work. [20] The appellants do not challenge the judge’s determination of the quantum of the award; they contend that no loss has been proven. They maintain the judge’s conclusion is based entirely on speculation that Mr. Ali may not be able to continue working in his present capacity earning the salary he is paid. But the fact remains, Mr. Ali’s marketability has been impaired by the injury he suffered; he is not capable of doing heavy physical work so some employment that would otherwise be available to him is now foreclosed. The judge made no fundamental error in concluding, as she did, there was a real and substantial possibility of Mr. Ali being able to earn less income in the future and giving what amount to examples of why there is no assurance Mr. Ali will always be employed as he is earning the income he does. What is said to be speculation devoid of evidentiary support is largely a matter of common sense. [21] I would not give effect to the fifth ground of appeal.
Update February 23 2018 – An appeal of the below case was dismissed this week by the BC Court of Appeal
________________________
Reasons for judgement were released today by the BC Supreme Court, Vancouver Registry, considering whether a Plaintiff’s substantial losses in the stock market could be compensated as part of a personal injury lawsuit. On the facts of the case the Court rejected this claim.
In today’s case (Barta v. DaSilva) the Plaintiff was involved in a 2007 collision caused by the Defendant. The Plaintiff alleged that the collision caused a mild traumatic brain injury and this “destroyed his capacity to earn an income, trading securities on his own account, and has caused him to lose the capital he accumulated and invested in the stock market“.
Around the time of the crash the plaintiff’s total portfolio was valued around $1.8 million. By the end of the 2009 the value plummeted to less than $400,000. In rejecting the claim that a brain injury had anything to do with this diminished asset, Mr. Justice Affleck provided the following reasons:
[56] By July 31, 2008, a year after the accident, the plaintiff’s portfolio had increased to $2,790,301.95. He had made successful trades in that year increasing his portfolio by almost $921,000. There is no possible inference to be drawn that cognitive impairment had damaged his trading ability during this time period. Then disaster struck. In September 2008 the market “crashed” and the plaintiff testified that he was “hit hard”.
[57] The plaintiff had purchased Lehman Brothers Holdings prior to the crash and had made a considerable capital gain in a few days. This appeared to have encouraged the plaintiff to hold Lehman Brothers even as his own financial crisis deepened, as did that of the market generally. This the plaintiff argues indicates his impaired judgment following the accident. However, I have no basis to conclude his decision to retain the Lehman Brothers stock was irrational at the time it was made. He had made a substantial quick profit in a few days and I believe he concluded he could eventually continue to make money by holding on. He did not foresee Lehman Brothers would be forced into bankruptcy. Many investors suffered a similar fate…
…The plaintiff engaged in risky stock market trading over several years. He developed a level of expertise that permitted him to earn a reasonable income. However his unwise decisions made in 2008, coupled with the stock market collapse, and the judgment in favour of Mr. Palkovics created financial conditions from which he could not recover. In my opinion the effects of the accident did not compromise his ability to trade on the stock market.
[61] It is impossible not to have sympathy with Mr. Barta’s disastrous losses on the stock market but the evidence does not satisfy me that he has proven that the defendant’s negligence caused them.
The BC Court of Appeal published reasons for judgement today confirming that it is entirely appropriate for an economist to rely on statistical census data in discussing average earnings.
In today’s case (Smith v. Fremlin) the Plaintiff was injured in a motor vehicle collision. She was a recent law school graduate who just started her career. The collision caused injuries which limited her capacity to work. At trial the Court relied on an economists report which discussed average earnings for legal professionals in helping assess the Plaintiff’s diminished earning capacity. The Defendant objected arguing the report relied on inadmissible hearsay, namely statistical census data. The trial judge found the defendant’s objections to be ‘nonsensical’. Despite this the Defendant appealed. The BC Court of Appeal dismissed the appeal fining statistical evidence is entirely appropriate in these circumstances. In reaching this conclusion the Court provided the following reasons: [18] The appellants say the Wickson report ought not to have been admitted into evidence at trial. They do not object to the qualification of Mr. Wickson as an expert but say his report is defective and inadmissible in two respects. First, it is said to be based upon evidence that is hearsay. Second, it is said to be irrelevant because it measures the income earning capacity of a group to which Ms. Smith does not belong. [19] The first of these objections, the hearsay objection, is unfounded. Mr. Wickson expressly describes the source of the data used in the preparation of his report. In addition to relying on published census data, he obtained a special tabulation providing education-specific 5-year age group income data from Statistics Canada. In my view, this data falls squarely within the admissible class of evidence described by Sopinka J. inR. v. Lavallee, [1990] 1 S.C.R. 852; it is information derived from enquiries that are an accepted means of arriving at an opinion within an economist’s expertise. The reliability of the data is supported by strong circumstantial guarantees of trustworthiness. It is, in words cited with approval in Lavallee, evidence of a “general nature which is widely used and acknowledged as reliable by experts in that field.” [20] Such was the opinion of this Court in Reilly. There, the Court noted that while hearsay evidence cannot generally be introduced through the admission of expert reports into evidence: [114] It is otherwise…with respect to the opinions of … economic experts based on the census data, which are routinely used by experts in their field … [21] In my view, the words of Smith J.A. in Jones v. Zimmer GMBH, 2013 BCCA 21, are a complete response to the appellant’s objection to the Wickson report and support and justification for the judge’s decision to admit it: [50] … Proponents of expert opinions cannot be expected to prove independently the truth of what the experts were taught by others during their education, training, and experience or the truth of second-hand information of a type customarily and reasonably relied upon by experts in the field. Accordingly, the degree to which an expert opinion is based on hearsay evidence is a matter to be considered in assessing the weight to be given the opinion: R. v. Wilband, [1967] S.C.R. 14 at 21, [1967] 2 C.C.C. 6; R. v. Lavallee, [1990] 1 S.C.R. 852 at 896, 899-900, 55 C.C.C. (3d) 97. [22] The second objection, that the Wickson report is inadmissible, as “wholly or largely irrelevant to the Plaintiff’s circumstances,” is equally unfounded. The appellants say the weight of the evidence at trial supported the conclusion that Ms. Smith would likely work within a limited range of the occupations open to a qualified lawyer. They say it was not helpful to receive and not appropriate for the court to rely upon a report describing the earning potential of all female lawyers in British Columbia (rather than, for instance, female lawyers in British Columbia practicing environmental or Aboriginal law in a not-for-profit setting). [23] This objection should be considered in light of the generally accepted approach to assessment of claims for loss of income earning capacity, which is, first, to set the parameters of the claim by referring to statistical evidence with respect to the class of individuals to which the plaintiff belongs, and then to adjust the resulting preliminary measure of damages to take into account contingencies that are particular to the plaintiff. [24] Average earnings were found to be the proper starting point for the assessment of damages under this head in Reilly, even though there was some evidence of the plaintiff’s specific professional interests. This Court observed: [122] The trial judge should have considered the possibility that the respondent might not have realized his professional goals or might have changed his goals. Qualifying as a lawyer opens up a number of career possibilities. It is reasonable to assume that the respondent would have remained in the profession. But he might not have developed the professional skills to achieve above-average earnings. He might have decided that he did not want to make the personal sacrifices often required to compete professionally at that level. Other interests, of which he had many before his head injury, or future family commitments, might have persuaded him to alter his goals. He might have chosen other disciplines within the profession with lower remuneration, such as prosecuting, working in the civil litigation departments of the federal or provincial government, or becoming in-house counsel in the private sector. It is well known that in the legal profession interests change and there is great mobility. In addition, there are many above-average lawyers with below-average incomes. [123] As well, the possibility that the respondent might have earned more money than predicted should be considered, although we consider that the chance of this happening was relatively low given the evidence of the small numbers of lawyers in Vancouver who have achieved outstanding financial success. This award is intended to cover the respondent’s working life to age 70, a period of approximately 36 years from the date of trial. Many things can change during such a long period of time and present-day assumptions are far from immutable. [25] Evidence of the earnings of the class of workers to which the plaintiff belongs is clearly relevant to the assessment of a loss of earning capacity. At some point, the evidence may be so general or vague as to be of little assistance but, in my view, that cannot be said of the statistical evidence used in this case. Evidence of the lifetime earning capacity of female lawyers in British Columbia, according to Mr. Wickson’s testimony in cross-examination, was the most specific data available. No further breakdown of incomes of female lawyers in this province by areas of practice is available. The Wickson report therefore was the best available evidence of what has been recognized as the starting point of the assessment of the loss of income earning capacity. It was properly admitted by the judge.
When Courts in BC assess damages for future ‘diminished earning capacity‘ no deduction is to be made for income taxes to be paid on those funds. Although this is not a new legal development, it is nice when Courts summarize the law in a concise statement as was done in reasons released this week by the BC Supreme Court, Vernon Registry.
In this week’s case (Kelly v. Kotz) the Plaintiff was awarded $16,000 for diminished earning capacity following injuries sustained in a vehicle collision. The basis of the award was that the Plaintiff needed to attend a rehabilitation program to address her injuries and this was an assessment of her anticipated lost earnings during this time. ICBC argued the award should be reduced by tax obligations. Madam Justice Hyslop rejected this argument and provided the following concise reasons: [4] The burden of proof is whether there is a real and substantial possibility that the plaintiff will suffer a future loss of income. Ms. Kelly has met that burden. Ms. Kelly seeks $16,000.00 as a loss of wages while she pursues the program recommended by Dr. Brownlee. This future loss of income is based on Ms. Kelly’s annual income of $60,000.00 and benefits roughly estimated at $500.00 per month. Ms. Kelly will need to take three months off to attend this program; this is the basis of the loss. [5] The defendants did not dispute these numbers, but disputed whether it should be a net amount as opposed to a gross amount. [6] Past loss of income is a net amount after deduction of income tax. Future loss of earnings is an assessment and there is no deduction for income tax: Arnold v. Teno, [1978] 2 S.C.R. 287… [8] I order that the plaintiff be awarded $16,000.00 for future loss of income.
Reasons for judgement were released today by the BC Court of Appeal stripping a Plaintiff of modest damages awarded for diminished earning capacity.
In today’s case (Kim v. Morier) the Plaintiff was injured in a collision and sued for damages. Despite her injuries she was able to work 12-15 hour days as a floor plan technician. She had no lost income by the time of trial. Her injuries lingered and were expected to indefinitely though the “degree of disability would be mild, that her level of disability is “fairly small” “.
In overturning the $10,000 damage assessment for this loss the BC Court of Appeal provided the following comments on the evidentiary foundation needed for diminished earning capacity damages: [6] On appeal, the defendant submits that the Court erred in making an award under this head in the absence of a finding of a “real and substantial possibility” that Ms. Kim’s earnings in future would be impaired. The defendant relies in particular on Roberts v. Kidd (1998), 52 B.C.L.R. (3d) (C.A.), where Mr. Justice Hollinrake for the majority noted that it is not sufficient for an award under this head for the plaintiff to testify as to a loss of confidence or ability to project herself without showing a “functional” element. (Mr. Justice Lambert dissented on this point.) In the result in Roberts, this Court set aside the award for diminished income and incapacity. [7] More recently, in Perren v. Lalari, 2010 BCCA 140, 3 B.C.L.R. (5th) 303, this court emphasized at paras. 21, 32, and 33 the requirement for the plaintiff to meet the onus of showing at least a “real possibility” of future loss, as opposed to a theoretical loss. Similarly, in Steward v. Berezan, 2007 BCCA 150, 64 B.C.L.R. (4th) 152, the Court discussed the comment of Madam Justice Southin in Palmer v. Goodall (1991), 53 B.C.L.R. (2d) 44, to the effect that it was “impossible to say” the plaintiff in that instance would not suffer reduced earning capacity in the future. Mr. Justice Donald wrote in Steward at para. 17 But the language in question there was used in the context of appellate review and, with respect, it cannot be transposed to an original analysis at the trial level. The claimant bears the onus to prove at trial a substantial possibility of a future event leading to an income loss, and the court must then award compensation on an estimation of the chance that the event will occur: Parypa v. Wickware, 1998 BCCA 88, 169 D.L.R. (4th) 661¶ 65. This is not a heavy onus, but it must be met for a pecuniary award to be justified. [8] In my view, the trial judge here did err in equating the loss of capital asset here with the plaintiff’s own perception. As the cases demonstrate, that is not enough. The plaintiff must show that it is a realistic possibility she will be less able to compete in the marketplace – with economic consequences, not merely psychological ones. In my view as well, the trial judge’s statement made after the award was pronounced, that Ms. Kim “may” be less capable of maintaining her disciplined approach to work also fell short. As we suggested to counsel this morning, the word “may” is essentially speculative and does not equate to a finding of a real possibility. [9] Mr. Carta said all that could be said in support of the award, but I agree with the defendants that as a matter of principle the findings here did not support an award for loss of earning capacity. [10] I would allow the appeal and set aside the award under this head. I would also order that the parties bear their own costs, given that this appeal was brought as a matter of principle.
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.