Tag: Statistical Evidence

Statistical Census Data "Squarely Within the Admissible Class of Evidence"

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.
 

"Nonsensical" Objection to Statistical Evidence Rejected

Statistics have their place in trial.  When proving average earnings of certain occupations the shortcut of referencing statistical data can be of great value and save time and money.  Reasons for judgement were released last week by the BC Supreme Court, Victoria Registry, addressing this.
In last week’s case (Smith v. Fremlin) the Plaintiff was injured in a 2009 collision.  She was a recent law school graduate at the time just entering her career in law.  It was found that, as a result of the injury, she likely could not compete in private practice and would have lifelong limitations in her working capacity.  The Plaintiff introduced statistical evidence of the present day value of a lifetime of earnings for legal professionals.  The Defendant objected to this arguing witnesses of fact instead should be called to address this.  In rejecting this “fundamentally flawed” objection Mr. Justice Groves provided the following reasons:
[43]         Counsel for the defendants took significant objection to the report of Robert Wickson.  At trial, I rejected their argument that the report should not be admitted as evidence.  The substance of that argument is worth considering in these Reasons. 
[44]         It was the position of the defendants that any report which attempts to provide evidence to the court as to average income of persons within certain employment designations is fundamentally flawed.  It was the position of the defendants that the court should require the plaintiff to produce evidence of persons, working as practicing lawyers, who could testify as to what they earn.  The suggestion was further made that these witnesses should be women practicing law in British Columbia. 
[45]         One must keep in mind that all parties appear to have agreed to this matter being litigated under the Fast Track model in three to four days.  It is nonsensical to require a party to prove a claim by calling a potentially large number of witnesses, in this case, female lawyers in British Columbia of the same age, to testify.  It is folly not only as to the time and cost, but also as to the possibility of finding this information in advance.  It would require people to willingly disclose their income.  Additionally, it is folly when one considers the number of persons that would have to be called to create any level of statistical reliability. 
[46]         What this Discovery Economic Consulting report shows is that for persons who fall within the NOC classification of ”Lawyers and Quebec Notaries”, the potential earning capacity is approximately $1.94 million over the course of their career.  Importantly, the persons that fall within this classification are a much larger body of persons then simply practicing lawyers.  Although numerous types of lawyers and notaries are included in this classification, it also includes judicial assistants, advisory counsel, articling students, advisors of law and corporate affairs, and a number of other job classifications which may not require law degrees, such as legal officers and legislative advisors. 
[47]         I accept that this report is evidence of lifetime capacity for someone with the career path that Ms. Smith was undertaking.  In fairness, however, the number should be increased as a number of persons falling within the classification are not lawyers and employed in occupations, likely to be earning less, such as articling students.  I find that working to age 69 is not unreasonable.  As such, I would find that a reasonable dollar figure for lifetime earnings for a lawyer is $2,000,000.

What's Sex Got to do With It? Gender and Damages for Diminished Earning Capacity


Imagine two individuals catastrophically injured due to the negligence of others.  The injuries will be totally disabling over the course of their lifetime.  The individuals are identical in every way except for their gender.  Statistics tell us that the man’s lifetime earnings absent injury would likely exceed those of the woman.  In these circumstances is it fair to award the woman less damages in a personal injury lawsuit for diminished earning capacity (future wage loss)?
The BC Court of Appeal addressed this issue in reasons for judgement released this week (Steinebach v. O’Brien).  In short the BC Court of Appeal held that while it is improper to reduce a female’s diminished earning capacity award based on “simply discriminatory” components, statistics as to the difference of lifetime earnings cannot wholly be ignored.  However, the Court went further and stated that it would be proper to offset this difference in part by adding an economic value to females statistically greater participation in child-rearing and housekeeping activities and addressing this in damages for pecuniary loss.   Mr. Justice Groberbam provided the following useful reasons for judgement:

[60] There are, in fact, a number of different components that account for the difference between women’s average earnings and those of men. Some are simply discriminatory – they reflect historical patterns of undervaluing the work that women do, and paying them less than men for similar work. The defendants appear to concede that such factors should not be used to reduce damage awards for infant female plaintiffs.

[61] It seems to me that such a concession is appropriate. It is no longer seen as acceptable that women should earn less than men simply by virtue of their sex. It would appear that such blatant discrimination is vanishing; in any event, the courts should not countenance such discrimination by incorporating it into damages awards.

[62] Others components of the difference between men’s and women’s average earnings may, indeed, reflect lifestyle choices. Of particular importance are patterns of earning related to childbearing and child-rearing. Women, to a much greater extent than men, leave the workforce or engage in part-time work so that they are able to bear and raise children.

[63] In MacCabe v. Westlock Roman Catholic Separate School District No. 110, 2001 ABCA 257, 96 Alta. L.R. (3d) 217, it was held that it was an error in principle for the trial judge not to have taken into account negative contingencies associated with childbirth and child-rearing in assessing future income loss for a female plaintiff who had indicated, before she suffered her injury, that she wished to have several children and would consider staying home with them…

[65] To some extent, I agree with the reasoning of the Alberta Court of Appeal. The fundamental purpose of tort damages is compensation of victims. It would be highly artificial to impose on that system of compensation a regime designed to deal with inequalities that are inherent in the lifestyle choices that people actually make.

[66] The difficulty I have with the approach in MacCabe, however, is that it treats child-rearing as an activity having no economic value. I do not believe that this reflects the reality for most parents who choose to withdraw from the paid workforce to raise children, or choose to take part-time work in preference to full-time work. Nor am I of the view that the law requires child-rearing to be treated as a non-economic activity.

[67] The value of child-rearing has long been recognized in the domain of family law. Spouses are treated as economic partners. Where one takes over child-rearing responsibilities that would otherwise have to be paid for or shared by a spouse, he or she is still seen as contributing to the family’s economic well-being, and this may have an effect on family asset division in the case of marital breakdown.

[68] This is not a mere quirk of family law, but the reality of most family units where one spouse withdraws from the workforce (or reduces his or her working hours) in order to raise children. Such a decision is rarely taken lightly, and is typically accompanied by a re-allocation of family resources rather than being a hardship suffered by the non-income-earning spouse alone.

[69] The burden of economic costs being a shared one, it can be misleading to represent it as simply being borne by the spouse who does not earn an income. Yet, for the purposes of earnings tables, this is exactly how the burden is reflected. For certain purposes, it would be more accurate to account for the shared burden by notionally transferring earnings from the income-earning partner to the partner who decreases his or her income in order to devote time and effort to child-rearing.

[70] Women are much more likely than men to leave the workforce temporarily or reduce their paid work in order to take on homemaking or child-rearing roles. The result is that earnings tables reflect the economic costs associated with such decisions as falling disproportionately on women. Earnings for men are thereby overstated, while those for women are understated.

[71] Even if it were to reject the idea of treating the costs associated with such decisions as shared ones, the Court would still have to adjust earnings table amounts to reflect the economic value of child-rearing. At one time, it may have been debatable whether a spouse who took on child-rearing or housekeeping responsibilities could claim compensation if, as a result of a tort, s/he became unable to continue to perform them (see Regina Graycar, “Hoovering as a Hobby and other Stories: Gendered Assessments of Personal Injury Damages” (1997) 31 U.B.C. L. Rev. 17). It is now established, however, that a person who undertakes housekeeping activities and is disabled from doing so can make a claim to pecuniary damages: Kroeker v. Jansen (1995), 123 D.L.R. (4th) 652, 4 B.C.L.R. (3d) 178 (B.C. C.A.).

[72] It seems to me that, in line with Kroeker, the courts must not presume that the absence of monetary recompense for an activity necessarily means that pecuniary damages will be unavailable to a plaintiff who is disabled from engaging in it. Because earnings tables fail to account for the value of such unpaid activities as child-rearing and housekeeping, they will tend to represent under-estimates of a plaintiff’s loss of future earnings.

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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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