Source: http://bc-injury-law.com/blog/tag/diminished-earning-capacity
Timestamp: 2019-04-19 18:32:31+00:00

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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.
 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.
 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”.
 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.
 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.
 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.
 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.
 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.
 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.
Reasons for judgement were released last week by the BC Court of Appeal sending a case for re-trial after a judge failed to adequately explain how substantial damages for diminished earning capacity were assessed.
In the recent case (Morgan v. Galbraith) the Plaintiff was injured in a 2006 collision. He worked as a senior account manager at the Royal Bank of Canada at the time. Following the crash he returned to this job with accommodation until his contract expired. From there he never returned to work at the bank instead he pursued a career in professional lacrosse. This chapter of his life ended with a concussion suffered in 2011. By the time of trial he was working as a basketball and lacrosse coach.
 The economic evidence relied on by Mr. Morgan quantified lifetime earnings of a sport coach in Oregon at $883,004. The judge did not explain the basis of his $700,000 assessment. This amount approximates 80% of lifetime earnings of a coach, notwithstanding that Mr. Morgan is now employed as a coach. I do not mean to imply that the assessment must be a mathematical calculation. Rather, my point is that there must be findings of fact on which to base the assessment. Here, the reasons for judgment on this point are not sufficient to permit appellate review. The judge gave no hint as to the factual basis on which he reached the conclusion that on these facts $700,000 was an appropriate measure of Mr. Morgan’s future damages. The judge did compare this case to another similar case, but, in my view, that would not be an appropriate way to assess what is essentially a pecuniary damage award. I do not consider that it is appropriate for this Court to infer from the judge’s reasons the necessary findings of fact in order to substitute a different award or to affirm the correctness of the award.
 The judge could well have chosen the earnings approach given that Mr. Morgan was likely to pursue a career in sport regardless of the accident and that doing so after the accident was possible but with limitations. The judge made no findings concerning the extent of those limitations. As I have concluded that the appropriate disposition of this appeal is to remit the question of the assessment of damages for future loss of earning capacity to the judge, I will leave to the trial judge the question of the appropriate approach to adopt. To reiterate, I agree with Mr. Morgan that on a proper evidentiary basis the judge has already found that there is a loss of future earning capacity under the Perren test. He need not reconsider that finding. But it will be necessary for him to revisit the assessment on a proper factual underpinning.
 If the assessment is still to be based on the capital asset approach the judge must consider the four questions in Brown in the context of the facts of this case and make findings of fact as to the nature and extent of the plaintiff’s loss of capacity and how that loss may impact the plaintiff’s ability to earn income. Adopting the capital asset approach does not mean that the assessment is entirely at large without the necessity to explain the factual basis of the award: Morris v. Rose Estate (1996), 23 B.C.L.R. (3d) 256 at para. 24, 75 B.C.A.C. 263; Mulholland (Guardian ad litem of) v. Riley Estate (1995), 12 B.C.L.R. (3d) 248 at para. 43, 63 B.C.A.C. 145.
 In conclusion, on this ground of appeal, I would remit the question of the quantification of future loss of earning capacity to the trial judge to reassess damages in accordance with these reasons.
Reasons for judgement were released this week by the BC Court of Appeal addressing the broad scope of permissible cross examination when a Plaintiff advances a claim for diminished earning capacity.
 Ms. Golestani contends that she should not have been cross-examined about receiving government financial assistance when immigrating to Canada or about leaving her studies to pursue the business opportunity with Mr. McBryde. Ms. Golestani initiated proceedings to recover damages from some of the respondents, and in so doing placed a number of matters in issue, including her earning capacity and her occupational goals. In my view, the cross-examination complained of was an attempt to explore these issues, and did not exceed the permissible limits of cross-examination.
This week the BC Court of Appeal provided reasons explaining that it is not appropriate for a judge or jury to reduce damages for diminished earning capacity when there is a possibility the Plaintiff will be incarcerated in the future.
42] I do not agree the judge erred as alleged. I reach this conclusion for three reasons. First, the judge was not asked to give the instruction now advocated, notwithstanding the opportunity given to counsel to comment on the proposed instructions. Second, there was no evidence upon which a jury could assess the value of such a contingency. Third, and most important, I do not consider it would have been appropriate for the jury to reduce the future damage award for the negative contingency of a possible future jail sentence, in the circumstances before the Court. Mr. Albert stood in the courts, and in the community, as innocent until proven guilty. Even if proven guilty, there was no certainty that he would receive a jail sentence. In my view, it would have been entirely speculative for the jury to reduce the damage award to reflect the chance that he might be convicted on the outstanding charges. This is unlike the case relied upon by the appellants, British Columbia v. Zastowny,  1 S.C.R. 27, (2008) S.C.C. 4, wherein the Supreme Court of Canada, on appeal from this court, affirmed the appropriateness of a deduction in damages to take account of a period of incarceration that was established as a fact at the trial.

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