Claiming Loss of earnings in your Personal injury compensation claim

The amount of compensation a person receives for injuries and financial loss is fixed at the point your claim is settled, or the amount is decided on by a judge. Compensation lawyers call the claim for earnings lost up to that time, Past Loss of Earnings. This is even if your earnings have returned to normal by that time. Lost earnings continuing, going-forward, or earnings not presently being lost out-on but expected in the future, solicitors call, Future Loss of Earnings.

You know your regular earnings, missed opportunities to work overtime, and if your pay progression is likely to be cut short because of your accident. Your solicitor can only work with the detail and evidence provided to him, or her. Ensuring your lawyer gets all the information they need helps them to optimise your loss of earnings compensation.

When it comes to claiming financial loss you’ve suffered because of an accident injury, your entitlement is the difference between what you have received from your employer in company sick pay and government, Statutory Sick pay, and the amount you would actually have received had you not been off-work through injury.

Most compensation for road traffic accidents, accidents at work, and accidents on premises, is paid by the insurance company for the persons responsible. Your solicitor will need to send to the insurance company’s representative copies wage slips, bank statements, or print-outs, as from both before the accident and afterwards, until your injuries have returned to normal. If the responsibility for the accident not being your fault is all agreed, there’s usually no reason why you can’t request an early interim payment in reimbursement of some of your losses so far.

Injury compensation lawyers in England traditionally calculate the amount of earnings loss by working-out what you earned in total over the whole period of 13 weeks, prior to the week in which the accident happened. The average you received each week, over that 13-week period is calculated by taking that total and dividing it by 13.

The weekly pay figure used is the bottom-line figure called Net Pay that has gone into into your bank account after all the deductions have been taken out like income tax, National Insurance contributions and any other stoppages you normally pay, like student loan repayments or deductions made by court order.

Not many people are paid weekly nowadays. Most of us are paid monthly and we receive a payslip at the end of the month. Unless your accident has happened at the end, or quite near the end, of the month, the payslip for the next payslip you receive is going to show the abrupt drop, from normal pay, down to Statutory Sick Pay.

Even if you’re lucky that your contract pays you Company Sick Pay at a near normal rate, there’s usually a temporary drop until the Company Sick Pay kicks-in. What I tend to do is completely ignore the payslip for the month in which the accident happened, and work out an average weekly figure from the payslips for the 3 months net pay received prior to the pay-month in which the accident happened. This works ok where a client’s working hours are consistent from one month to the next and so, therefore, usually is their Net pay.

It doesn’t work well where a client’s Net pay varies significantly each month depending on availability of overtime. In this situation, I usually ask a client for his/her payslips for 6 months before, plus the one for the month in which the accident happened.

If the number of overtime hours you’ve missed out on during the weeks or months you’re claiming compensation for is the same, or roughly the same, as those you’d worked before the accident, then the lost overtime pay is likely also included in the net weekly, or monthly, net rate you’re using.

If you’ve been off work for a long time and the opportunity to work overtime, increased overtime, has only arisen whilst you’ve been off, your solicitor can request your payroll or HR department provide information on what overtime would have been available for you to work, had you been able.

If you’ve been off work for a long time and the opportunity to work overtime, increased overtime, has only arisen whilst you’ve been off, your solicitor can request your payroll or HR department provide information on what overtime would have been available for you to work, had you been able.

Sometimes, especially around such times as Christmas, Summer holiday time, and the end of your employer’s holiday year, adjustments are made by payroll to add more to pay packet than normal. It’s important to look if these adjustments lead to an uncharacteristic picture, too much more above, or too little below, what would otherwise have been your real net pay for that week.

If your injuries are so serious that your capabilities are likely to affect the hours you are able to work, or the hourly rate you’ll be paid, for longer than, say several weeks, perhaps even permanently, then it’s important your solicitor gets a picture of your yearly pay pattern. In these cases I frequently ask a client to let me have copies of his/her P60’s going back a few years. A P60 is the code description given by HMRC to the annual statement your employer is obliged to give you after each April, which tells how much you’ve been paid during the tax year just gone.

Pay for some workers varies over the course of a year. Some examples might be:-

• zero-hours contract workers offered different number of hours each week.

• Warehouse workers, or shop workers, whose overtime increases in the months leading up to Christmas.

If using Net weekly, or monthly, pay figures for the 3 months (or 13 weeks) received before the accident would fail to take into account a period of seasonal increase in hours you would have worked during your time-out due to injury, then you could look for evidence of what your true hours would have been in a different way; like:-

• looking back to how many hours you worked in the same weeks or months at earlier times in the year, or even in previous years.
• identifying a colleague who, uninjured, actually worked more or less the same hours you would have done and getting permission to use their information as proof of the opportunity you’ve lost.
• have your solicitor write to your employer’s payroll department manager, or HR manager, and request a letter of verification of what hours would have been available for you to work.

You don’t either need to wait until your injuries have fully recovered, or before you return to work before requesting the paying insurance company make an interim payment of lost earnings suffered so far.

Your solicitor can request an Interim Payment if say;

• Your employer has only been paying you Statutory Sick Pay, so there’s a big difference between what you’re receiving and the pay you’d normally expect.
• You’ve returned to work on light duties and receiving only part of your full level of earnings.

It’s best not to leave making an interim payment request until you’re desperate for money. Insurance companies don’t like giving interim payments; if they know a claimant is quite desperate for cash they see it as an opportunity to see if there’s a chance of ending the claim completely and prefer to put forward an offer of settlement to tempt you.

If your injuries haven’t healed yet, or had time to settle, such that the longterm isn’t known yet, your solicitor will have to make an application to the court for an Interim Payment Order. This takes time, so it’s best to raise your pressing need for at least some of your earnings lost so- far, before you reach crisis.

Linked to the value you receive from working, incidental to your pay-cheque and which you might also lose alongside earnings are so-called, fringe-benefits, or benefits-in-kind. These used to be more common. Only employees whose duties overlap with personal time nowadays get subsidised costs of living.

This subject of claim can often be overlooked as trivial, or opportunistic, but there’s no reason not to claim compensation for extra expense you personally incur whilst work that was otherwise covered by your employer and free’s-up your own pocket.

Classic, so-called, ‘fringe benefits’ that workers might have lost out on during absence are:

• Canteen meals or lunch vouchers, the benefit of which you’ve had to replace from your own money, whilst off-work.
• Use in personal time of a company car, or a mileage allowance which also subsidises the cost of running the car in personal time.

Modern examples of missing an indirect benefit to spending weekdays at employer’s premises, might be:

• Having to pay additional costs of electricity and heating at home whilst recovering from injury.
• Running a home office whilst recovering from injury, when normally you’d work totally, or less often, at the office.

You’ll need to keep as much proof of expenditure as possible. The stronger your proof that the extra expense has only happened because of your accident, the greater your chance of claiming it from the compensating insurance company.

Employers usually continue to provide private family health insurance benefits you might have paid into, at least in the short to medium term.

If you eventually have to pay more, through a higher premium deduction after you return to work, to keep the same level of cover, you might be able to claim the increased cost to you. Your solicitor will need write for proof from your employer, and possibly the health insurance company.

If you lose your job because of your accident injuries and, in-turn, lose the benefit of the works’ health insurance scheme you might successfully claim the cost of replacing it. Again, you’ll need proof of all the relevant factors. Your solicitor will look into this for you. Make sure you bring it to their attention.

At some point during your claim your recovery the medical experts your solicitor has instructed, will have a sufficient assessment of how well you’ve healed so far to enable them to predict the future outlook. The experts will provide your solicitor with final reports, and may even be required to exchange views with experts instructed for the insurance company. The final reports will give your lawyers a picture of lasting health problems, or restricted capabilities the medical experts predict that you’ll likely suffer going-forward. This helps identify any future treatment needs, or long-term living assistance you’ll have to find funding for. Consequently, you can claim finance for these needs in the final compensation settlement, or court award.

Have in mind that only you fully know what capabilities are expected of you to do your work over the long-term. It’s vital that you speak-up before your solicitor starts negotiating the insurance company, if you feel your injuries haven’t healed fully, or cause you continuing problems that might continue affect your future capabilities.

Where your injuries make it certain that you won’t work at all in the future, or where you can work in the same job or in a different job but with limitations and for less pay, then your lawyers will be able to calculate and claim a specific amount to compensate you for this future, ongoing loss of, or reduction in income. Here, there’s a definite loss of future earnings.

Maybe the evidence is strong that it’s likely you’ll have to give up work sooner than normal retirement age. In that case your lawyers can still use a set of economic tables to fix on an amount of pay you’ll likely lose beyond that future date. Again, here, there’s going to be a highly probably loss of future earnings.

Sometimes, however, the possibility of your working capabilities being affected in the long-term are not so obvious your solicitor or the doctors reporting in your case. You know your work and what’s expected of you in order to be able to perform it. You’re also best able to foresee how you might be affected from doing it in the future. So, take time to monitor your capabilities and reflect on this.

Ongoing, chronic pain drains people of stamina, accelerating the onset of fatigue. Weakened bone structures and ligaments can result in impaired flexibility and strength. All of these can reduce your ability to work regular, and for a full-time duration, long after the initial healing is over.

Especially in the case of joint fractures, in the spine, to the ankles, wrists and knees, orthopaedic medical expert reports may predict the likelihood of early onset osteoarthritis. For manual workers this may indicate a likely need to change job, or working the same job but fewer hours taking home less pay. Lawyers call this a future, reduced, earnings capacity.

You can help your lawyers by drawing attention to your doubts for your working future so that they might gain medical opinion and, possibly, evidence from others experienced in your trade, about how certain a future reduction in your earnings capacity is likely to be.

Your loss of earnings capacity compensation is then valued at the percentage likelihood that you’ll be affected, versus the possibility that you’ll be capable of carrying on working, as normal, to retirement, without it impacting your earnings. The compensation your lawyers will argue for is the amount you would claim if the prospect of you not working in future is certain, minus a percentage to reflect the possibility that you will continue. In this way, the law considers it fair that you don’t potentially receive double-pay. By this I mean you the actual pay in future from employment in the future, plus the insurance company’s compensation for the same amount. Its considered fair that you’re entitled to one or the other.

The rule for very nearly all injury compensation claims is that, once settled-up, the right to claim is finished, once-and-for-all. There’s no going back for more if you’ve miscalculated or overlooked something from the list of your expenses. Your lawyer isn’t a mind reader. Making sure he or she get the full-picture will help them set your loss of earnings claim out as complete as possible.