Understanding Future Income Loss Claims
A future income loss claim is a claim for the earnings that a plaintiff would have made, but now will not, due to the injury or injuries the plaintiff sustained. A plaintiff need only establish that there is a reasonable and substantial risk of loss of income in the future in order to be entitled to damages under this heading.[1] By its nature, a future income loss claim is fact-based and hypothetical. As a result, it is not a matter of strict mathematical calculation. Predicting a minor plaintiff’s future income loss is uniquely challenging because they often are not yet in the workforce, and so there is insufficient income or employment history to refer to.
So, what do Courts look at then to assess a minor plaintiff’s future income loss claim?
Key Considerations for Predicting a Minor Plaintiff’s Future Income Loss
1. Age and Development: The age of the minor at the time of the injury plays an important role. Younger plaintiffs (middle school or below) can be more difficult to assess because there is less historical data to establish their performance in school or their interests. In contrast, older minors (high school) are more likely to have have clearer educational trajectories and/or plans about what they want to pursue in the future (such as pursuing post-secondary education or starting in the workforce). There is also the issue of how the injury affects the plaintiff’s present development. For example, did the injury and subsequent treatment cause the plaintiff to repeat a grade and/or not graduate on time with their peers?
2. Interests and Aptitudes: Outside of education, another consideration is a plaintiff’s extra-curricular activities or interests. For example, if a plaintiff seems to have a clear gift for playing an instrument but suffers a hand injury, there may be a claim that the plaintiff’s potential for a career in music has been impacted. Another example would be if a plaintiff was a competitive athlete and suffers a leg injury, there may be a claim that the plaintiff’s potential sports career has been impacted.
3. Health Considerations: The extent of the injury and any long-term implications on the minor’s physical and mental health will influence their ability to work in the future. For example, an ankle fracture as opposed to a traumatic brain injury may not have the same long-term consequences in a plaintiff’s life. Further, the impact on an injury on a plaintiff’s mental health can also be important to consider if it affects a plaintiff’s motivation to work or desirability as an employee.
4. Expert Testimony: Engaging experts can help establish a reasonable estimate of future earning capacity. Medical evaluations and reports can help establish to what degree and for how long an injury is expected to impact the minor plaintiff. Vocational experts can analyze labor market trends, industry demands, and educational requirements for various professions to assist in assessing what a minor plaintiff may have earned in a given field. Caution should be exercised, however, if relying on gender-based statistics. In general, Courts will be hesitant to rely on gender-based statistics if there is other more accurate information available.[2]
5. Family Influence: Insight about the parents or even siblings of a minor plaintiff may also be a consideration. For example, if a plaintiff’s older siblings and parents all obtained a level of post-secondary education, then a Court may be more willing to accept that, but for their injury, the plaintiff would have done so as well. Another example is if the plaintiff’s older siblings and parents have a track record of being good workers, a Court may be more inclined to find that, but for their injury, the plaintiff would have had a strong work ethic like the rest of their family.
Case Law Examples
Below we will review and discuss two cases where the Court addressed future income loss claims.
Moretto v. Nicolini-Fernia, 2017 ONSC 3945 – no income loss claim proven
In this case, the plaintiff Natalie Moretto attended a birthday party where she was bitten by a dog in the face. Her injury required 10 sutures. The plaintiff also claimed to suffer from psychological difficulties due to this incident. At the time, the plaintiff was 15-years old.
On the topic of economic loss, the Court accepted that the plaintiff’s facial scarring made her feel socially inhibited in high school, which affected her self-esteem. However, the Court also heard that the plaintiff had graduated from high school on time and, at the time of trial, was doing a social work program at a community college. The Court observed that, as a student, the plaintiff was making choices in accordance with her interests and aptitudes and was not being deterred by the prospect of social interaction in relation to her future career endeavors. The Court found insufficient evidence to support that the plaintiff’s present loss of self-esteem would impede her ability to earn an income in a competitive labour market. As a result, the Court found that the plaintiff had not proven a loss of income claim.
Lee v. Toronto District School Board, et al., 2013 ONSC 3085 – plaintiff’s income loss calculated to be $1.8M
In this case, the plaintiff was a seven-year-old Grade 2 student who suffered a brain bleed during an afternoon recess after being allegedly punched in the head by another student. The brain bleed resulted in a number of physical, mental, and emotional impairments for the plaintiff. Ultimately, the Court dismissed the claim on the basis that the school was not negligent in failing to prevent the assault. However, the Court nevertheless went on to assess the issue of compensation if the defendants had been found liable to the plaintiff.
At the time of trial, the plaintiff had graduated from high school with high marks and was attending the University of Toronto doing a Bachelor of Arts program in Psychology. The plaintiff gave evidence that, but for his injuries, he would have pursued a professional or graduate program at the Masters or Doctorate level in the field of mathematics. The Court heard evidence that the plaintiff’s parents both taught at a polytechnic university in Hong Kong before immigrating to Canada and that their family values education.
The plaintiff relied on several expert reports and evidence in support of his income loss claim. One report was from a vocational-rehabilitation psychologist who opined that, but for the plaintiff’s injuries, he could have gone to graduate school or pursued a professional degree. A neuropsychiatrist opined that the plaintiff suffered from a severe cognitive disorder and so would not be likely to enter the competitive workforce. The plaintiff also relied on an actuarial valuation report, which set out three scenarios for the plaintiff based on the vocational-rehabilitation psychologist’s report:
- Undergraduate degree in sociology
- Master’s degree in sociology
- Doctorate in sociology
Based on the evidence, the Court found the second scenario most likely. The Court also considered that the plaintiff would likely need to retire early due to his injuries. As such, the Court calculated the plaintiff’s future income loss damages to be $1,864,021.
Conclusion
Quantifying future income loss claims for minor plaintiffs is nuanced. A good lawyer can assist in this process by helping you balance the various factors, expert evidence, and case law relevant to making this assessment.
[1] Gerula v. Flores, 1995 CanLII 1096 (ONCA).
[2] Rathan et al. v. Scheufler et al., 2023 ONSC 3232.
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