Podcast
Questions and Answers
Which of the following is NOT a way to prove loss of earning capacity?
Which of the following is NOT a way to prove loss of earning capacity?
What is the primary role of a life care plan in cases involving loss of earning capacity?
What is the primary role of a life care plan in cases involving loss of earning capacity?
Which type of expert is most likely to be consulted for assessing loss of earning capacity?
Which type of expert is most likely to be consulted for assessing loss of earning capacity?
What is the primary advantage of considering loss of earning capacity in addition to lost wages?
What is the primary advantage of considering loss of earning capacity in addition to lost wages?
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Which factor is likely to have the most significant impact on the valuation of loss of earning capacity?
Which factor is likely to have the most significant impact on the valuation of loss of earning capacity?
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What is the primary purpose of considering loss of earning capacity in personal injury cases?
What is the primary purpose of considering loss of earning capacity in personal injury cases?
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Which type of evidence is most likely to be used to demonstrate the potential for future financial loss due to loss of earning capacity?
Which type of evidence is most likely to be used to demonstrate the potential for future financial loss due to loss of earning capacity?
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Which of the following statements is true regarding the impact of loss of earning capacity on low-earners versus high-earners?
Which of the following statements is true regarding the impact of loss of earning capacity on low-earners versus high-earners?
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Which type of evidence is most likely to be used to demonstrate the immediate financial impact of an injury?
Which type of evidence is most likely to be used to demonstrate the immediate financial impact of an injury?
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Which of the following statements best describes the role of medical records in proving loss of earning capacity?
Which of the following statements best describes the role of medical records in proving loss of earning capacity?
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Study Notes
High-Earner vs Low-Earner
- High-earners experience greater income loss when unable to work due to injury
- Injuries can impact future career paths and income growth for high-earners
- Calculating damages requires specialized expertise to address unique factors in high-earner cases
Importance of Considering High-Earner Status
- Valuation of benefits, including loss of non-monetary benefits (e.g., insurance, retirement), adds to the financial impact
- Greater need for experts, such as forensic accountants and economists, to provide critical evidence for income analysis and projections
- High-earner cases have the potential for greater settlements or verdicts, reflecting the scale of the losses
Definition of High-Earner and Low-Earner
- Low-earner: individuals earning below the California median household income (2022: $91,905)
- High-earner: individuals earning significantly above the California median household income, often defined as several times the median income
Proving Lost Wages and Loss of Earning Capacity for Self-Employed Clients
- Gather tax returns (Schedule C) as official proof of income history
- Provide financial records (income statements, invoices, etc.) to track the flow of work-related money
- Show bank statements to confirm income was deposited
- Share client contracts to demonstrate potential work and its value
- Provide correspondence (emails, letters) to show delays or cancellations directly caused by the injury
- Show appointment records to prove the disruption in earning ability due to missed meetings or workdays
- Cite industry standards to compare earning potential to others in the field
- Consult an expert for complex projections of long-term impact
Importance of Loss of Earning Capacity
- Highlights the potential for future financial loss if the injury causes lasting disability
- Anticipated future losses can be projected using expert assessment, providing evidence for potential future damages
Why Both Lost Wages and Loss of Earning Capacity Matter
- Lost wages provide quantifiable evidence of immediate financial harm
- Loss of earning capacity addresses future income disruption
- Combined impact demonstrates the severity of the injury and its short- and long-term impact on livelihood, guiding fair and comprehensive compensation
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