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How to calculate Loss of Earnings in Medical Negligence Claims

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    When claiming loss of earnings in medical negligence claims it is always important to consider the specific circumstances of a Claimant and his or her ability to return to work – so how are loss of earnings calculated and what factors need to be considered?

    By Joachim Stanley

When people are injured as a result of medical negligence, they can find that their ability to work is significantly affected. Often, Claimants suffer significant financial losses as a result of their injuries. Many Claimants will be able to return to work after the negligence complained of.  Others may have restrictions on the role they are able to perform; some may never be able to work again.

I act for wide variety of Claimants who have different employment backgrounds and who have suffered a range of injuries that have had varying effects on their ability to work.  I need to undertake many types of investigation to ensure that my clients are properly compensated for any loss of earnings.  I set out below a summary of what I need to consider for my clients in some different scenarios:

A Claimant who is unable to return to work and who has previously worked

When calculating a Claimant’s losses in this situation, investigations have to be carried out into their past earnings during their previous employment before they were injured. This will act as a guide when calculating what their future earnings would have been if they were had been able to continue working.

A Claimant may be able to make a claim for their future earnings/losses based on their current salary.  However, if promotion was likely then it is usually possible to claim for the salary the Claimant could have expected to receive after that promotion (depending on how likely it was that this would be achieved).   It is only possible to claim for the higher salary from the point at which the Claimant could reasonably have expected promotion.

A Claimant who returns to work but not in the same job and earning a lower salary

In some circumstances, Claimants are able to return to work, but are unable to go back to the roles they once had due to their injuries. Consequently, many Claimants find themselves earning a lower salary. If this is the case and was as a direct result of the medical negligence, then a claim can be made for the difference in earnings.  I will look at a Claimant’s past earnings compared with their present earnings.   I would then expect to claim for the difference between those two figures.  This is because the primary purpose of litigation is to place the Claimant back in the position that s/he would have been in but for the negligence. If the Claimant is suffering from an ongoing disability then it will also be factored in that they may not be able to continue working for as long as they otherwise would have done.

A claim can also be made for being at a disadvantage on the open labour market. If a Claimant suffers an injury that means that, were they to lose their current role, they would be unlikely to, or would find it more difficult to, gain another one, then compensation can be awarded for that risk.

A Child Claimant

When a child is injured as a result of medical negligence, they may never be able to work or may be limited in the employment they can obtain. Calculation of these losses is more complicated by the fact that a child will usually have no employment history.

In this situation, investigations are usually carried out into the employment history of a child’s parents as a comparison. These losses are more speculative but is often the best guide.  Every child’s circumstances will be looked at individually.

Pension Loss

A Claimant’s work-based pension may also be affected by their inability to work given that most work based pension schemes now include contributions from the employer, at a percentage of the salary paid.

This will have the effect of reducing the total amount payable to a Claimant at the point of retirement or at the point the scheme reaches maturity. It is possible to calculate these losses based on the reduction of the contributions.

A Claimant may also need to retire earlier than anticipated as a result of an injury. This will have the affect of reducing the total amount of the pension as fewer contributions will be made and may also result in the pension being drawn prematurely.   These losses will be considered and included within a compensation claim.

Our Experience

The Clinical Negligence Team is a dedicated team of lawyers who are experienced in assessing potential clinical negligence claims and investigating the associated losses. The above is just an overview of this part of a claim, and there are often additional losses specific to an individual claimant’s circumstances.  We endeavour to ensure in every case that a Claimant’s full losses are investigated and claimed, and will also seek interim payments as early as possible to relieve financial difficulties which are usually particularly acute when a Claimant has been left unable to continue working.

Please contact me or one of my colleagues if you have any queries or for further advice on making a claim.

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