What If a Car Accident Leaves You Unable to Work?

Can I Receive Compensation If a Car Accident Prevents Me From Working?

Potentially, yes.

If another person’s negligence caused a motor vehicle accident and you suffered injuries as a result, your losses may include financial consequences associated with your inability to work.

The exact damages available depend on the circumstances of the claim, the nature and severity of the injuries, the applicable Alberta law, the available evidence, and the relationship between the accident and the claimed losses.

A personal injury claim may involve more than simply calculating the paycheques you missed while recovering.

A serious injury can affect your ability to earn money for years into the future, even if you eventually return to work.

Lost Income and Loss of Earning Capacity Are Not the Same Thing

One of the most important distinctions in a personal injury claim is the difference between past loss of income and loss of earning capacity.

Past loss of income

Past loss of income generally concerns income you would have earned but did not receive because your injuries prevented you from working or reduced your ability to work during the relevant period.

For example, you may have missed several months of work while recovering from a broken leg, spinal injury, traumatic brain injury, or other accident-related condition.

Loss of future earning capacity

Loss of earning capacity concerns the impact an injury has on your ability to earn income in the future.

You do not necessarily have to be completely unable to work to have a potential loss of earning capacity claim.

An injury may reduce the type of work you can perform, the hours you can work, your productivity, your ability to compete for jobs, or your ability to pursue the same career opportunities that would otherwise have been available to you.

This distinction is important because an injured person may return to work and still have suffered a significant loss of earning capacity.

What Is Loss of Earning Capacity?

Loss of earning capacity is concerned with the reduction in an injured person’s ability to earn income because of their injuries.

It is therefore broader than simply adding up the paycheques that were missed after an accident.

For example, suppose a construction worker suffers a serious back injury in a motor vehicle collision.

The worker may eventually return to employment, but may no longer be able to perform heavy lifting, work long shifts, climb ladders, work at heights, or perform other physically demanding duties.

Even though the person is working again, the injury may have reduced the person’s future earning opportunities.

That potential reduction in earning capacity can be relevant when assessing damages.

You Do Not Have to Be Completely Unable to Work

A common misconception is that an injured person can only claim future income loss if they are permanently unable to work.

That is not necessarily the case.

A person may continue working but still experience a reduction in earning capacity.

Examples may include:

• Being unable to perform overtime;
• Being unable to work the same number of hours;
• Needing additional breaks;
• Being unable to perform physically demanding duties;
• Being unable to work certain shifts;
• Being unable to accept promotions;
• Being unable to perform travel-related duties;
• Having to move into a lower-paying position;
• Being less competitive for employment;
• Having fewer career opportunities;
• Needing to change occupations; or
• Being at increased risk of future unemployment because of the limitations caused by the injury.

The particular facts and evidence determine whether these limitations support a claim for loss of earning capacity.

What If I Can Work but I Earn Less Than I Did Before the Accident?

A reduction in actual income can be important evidence of financial loss, but the analysis does not necessarily end there.

Your lawyer may need to examine why your income changed and whether the difference is connected to your accident-related injuries.

For example, an injured person may have moved from a physically demanding occupation to a less physically demanding job that pays less.

The difference between the person’s pre-accident and post-accident employment may provide evidence of the financial consequences of the injury.

However, every case is different. Changes in employment or income can have many possible causes, and the evidence must establish the connection between the injury and the claimed loss.

What If I Cannot Return to My Previous Career?

Some injuries make it impossible or impractical for a person to return to the occupation they held before the accident.

This can be particularly significant when the person’s occupation requires physical abilities that have been permanently affected.

Examples may include:

• Construction workers;
• Tradespeople;
• Warehouse workers;
• Delivery drivers;
• Professional drivers;
• First responders;
• Health-care workers;
• Manufacturing workers;
• Mechanics;
• Landscapers; and
• Other workers whose occupations require substantial physical activity.

The consequences can also affect people in office, professional, managerial and self-employed occupations.

Cognitive injuries, chronic pain, fatigue, psychological symptoms, or other limitations may interfere with concentration, memory, productivity, attendance, communication, decision-making, or the ability to maintain a normal workload.

What If My Injuries Affect My Ability to Concentrate or Think?

Not all work-related limitations are physical.

Some accident-related injuries can affect cognitive or psychological functioning.

Depending on the circumstances, an injured person may experience:

• Difficulty concentrating;
• Memory problems;
• Slower information processing;
• Fatigue;
• Headaches;
• Difficulty managing multiple tasks;
• Reduced tolerance for stress;
• Difficulty maintaining a regular schedule; or
• Other limitations that affect workplace performance.

These limitations may be particularly important in occupations that require sustained concentration, complex decision-making, high productivity, or significant responsibility.

Medical and functional evidence can help establish the nature and extent of these limitations.

What If I Am Self-Employed?

Self-employed people can face unique issues after a serious accident.

A self-employed person’s income may depend directly on their ability to perform physical work, manage employees, meet clients, travel, operate equipment, maintain a schedule, or manage the business.

An injury may therefore affect both the person’s personal earning ability and the operation of the business.

Establishing the financial impact may require business records and other evidence, such as:

• Corporate or personal tax returns;
• Financial statements;
• Invoices;
• Payroll records;
• Business contracts;
• Historical revenue;
• Business expenses;
• Employee records;
• Work schedules;
• Client records; and
• Other financial documentation.

The appropriate analysis depends on the structure of the business and the nature of the person’s role within it.

What Evidence Is Used to Prove Loss of Earning Capacity?

A claim for future earning loss or reduced earning capacity generally requires evidence.

Relevant evidence can include:

• Pre-accident employment records;
• Pay statements;
• Income tax returns;
• Employment contracts;
• Job descriptions;
• Performance records;
• Employment evaluations;
• Promotion history;
• Overtime records;
• Medical records;
• Functional capacity assessments;
• Vocational assessments;
• Occupational therapy evidence;
• Expert medical opinions;
• Economist evidence;
• Evidence from employers and co-workers;
• Evidence concerning retraining or alternate employment; and
• Other evidence relevant to the person’s earning potential.

The evidence needed depends on the nature of the injury and the complexity of the claim.

Why Your Employment History Matters

Your work history can provide important information about your earning capacity before the accident.

Lawyers may consider factors such as:

• Your occupation;
• Your earnings;
• Your employment stability;
• Your education;
• Your professional qualifications;
• Your training;
• Your career progression;
• Your overtime history;
• Your previous promotions;
• Your expected career path; and
• Your plans and opportunities before the accident.

The objective is not simply to assume that your highest historical income would have continued forever. Future earning capacity involves uncertainty and must be assessed using the evidence available.

What Factors Can Affect a Future Loss of Earning Capacity Claim?

A number of factors can affect the assessment of future earning capacity.

Depending on the circumstances, these may include:

• The nature and severity of the injuries;
• The prognosis for recovery;
• The person’s age;
• Education and training;
• Occupation;
• Pre-accident income;
• Employment history;
• Career progression;
• Transferable skills;
• Ability to retrain;
• Availability of suitable alternative employment;
• Physical or cognitive limitations;
• Potential future medical complications;
• Workplace accommodations;
• Labour-market conditions; and
• The probability of future events affecting income.

Courts generally assess future losses using the evidence available rather than assuming that every possible future event will occur.

Does My Age Matter?

Age can be relevant because the length of a person’s expected working life may affect the potential duration of an earning-capacity loss.

However, age is only one factor.

Education, career trajectory, health, occupation, qualifications, work history, medical prognosis and the evidence concerning future employment opportunities can also be relevant.

The assessment is therefore individualized rather than based on a simple formula such as multiplying current wages by the number of years until retirement.

What About Retraining for a Different Career?

If an injured person can reasonably perform other work, retraining or a career change may become part of the analysis.

This does not mean that an injured person must simply accept any available job.

The relevant question may include whether alternative employment is realistically available given the person’s injuries, abilities, education, experience, transferable skills, and other circumstances.

Where retraining is appropriate, there may also be costs and a period during which the person’s income is affected.

Vocational and occupational evidence may be useful when assessing these issues.

What Is Mitigation of Damages?

Personal injury law generally requires an injured person to take reasonable steps to mitigate, or minimize, their losses.

In an employment context, this can involve reasonable efforts to recover, participate in recommended treatment, return to work when medically appropriate, seek suitable alternative employment, or pursue reasonable retraining where appropriate.

Mitigation does not mean that an injured person must do something medically unsafe or unreasonable.

Whether a person has reasonably mitigated their losses depends on the facts of the individual case.

What If I Returned to Work After My Accident?

Returning to work does not necessarily eliminate a claim for loss of earning capacity.

You may have returned to work but:

• Earn less than you did before the accident;
• Work fewer hours;
• Be unable to work overtime;
• Require workplace accommodations;
• Have fewer opportunities for advancement;
• Be unable to perform certain duties;
• Have reduced productivity;
• Be unable to pursue the same occupation in the future; or
• Face an increased risk of future unemployment because of your limitations.

These circumstances may be relevant to a loss of earning capacity claim.

What If My Employer Accommodates My Injury?

An employer may be able to accommodate an injured employee by modifying duties, reducing hours, providing equipment, changing schedules, or assigning certain tasks to other workers.

An accommodation can allow a person to remain employed even though their earning capacity has been affected.

Therefore, continuing to receive a regular paycheque does not automatically establish that the accident had no impact on earning capacity.

The nature and permanence of the limitations and the evidence concerning future employment opportunities may still be relevant.

What If I Lose My Job After the Accident?

Losing employment after an accident does not automatically mean that the accident caused the job loss.

There may be many reasons an employment relationship ends.

The evidence must establish the connection between the accident-related limitations and the employment consequences being claimed.

Relevant evidence can include medical restrictions, employer records, performance information, employment correspondence, workplace accommodation records, and evidence concerning the availability of other suitable employment.

Can Pre-Existing Conditions Affect My Claim?

A pre-existing medical condition does not automatically prevent an injured person from making a personal injury claim.

However, the existence of a pre-existing condition can be relevant when determining what losses were caused or contributed to by the accident.

Medical evidence may be required to distinguish the effects of the accident from symptoms or limitations that existed beforehand.

It is important to be completely honest about your medical history. Attempting to hide a pre-existing condition can damage the credibility of a claim.

What If I Was Already Having Problems at Work?

Employment difficulties that existed before an accident can also be relevant.

A proper assessment should consider your actual pre-accident employment history rather than assuming that your income would have increased indefinitely.

Previous layoffs, unemployment, career changes, health limitations, disciplinary issues, or other employment circumstances may need to be considered when assessing what would probably have happened if the accident had not occurred.

What Experts May Be Involved?

More complicated loss of earning capacity claims may require expert evidence.

Medical experts

Medical specialists can provide evidence concerning diagnosis, prognosis, restrictions, treatment and the likely long-term effects of an injury.

Occupational therapists

Occupational therapists may assess functional abilities and limitations and provide opinions concerning workplace duties, accommodations and functional capacity.

Vocational experts

Vocational professionals may assess transferable skills, employment options, retraining possibilities and the types of occupations an injured person may reasonably be able to pursue.

Economists

Economists may assist in quantifying the financial consequences of a reduction in earning capacity, taking into account factors such as historical earnings, expected career progression, retirement assumptions and other relevant economic variables.

Not every personal injury claim requires every type of expert. The evidence needed depends on the complexity and value of the claim.

How Is Future Loss of Earning Capacity Calculated?

There is no single calculation that applies to every personal injury claim.

A future loss analysis generally requires an assessment of what the person’s earning capacity would probably have been without the accident compared with the person’s earning capacity after the accident.

That analysis involves uncertainty because nobody can know with certainty what a person’s career would have looked like decades into the future.

Evidence may therefore be used to estimate the likely range of outcomes and the probability of different future events.

Factors can include expected career advancement, future earnings, periods of unemployment, retirement, disability, retraining, alternative employment and other contingencies.

Why Your Tax Returns and Pay Records Matter

Financial documentation can be important evidence in a claim involving lost income or earning capacity.

Depending on the circumstances, your lawyer may need information such as:

• Income tax returns;
• Notice of Assessments;
• T4 slips;
• Pay stubs;
• Employment contracts;
• Payroll records;
• Commission statements;
• Bonus records;
• Overtime records;
• Business financial statements; and
• Other income documentation.

Keeping these records can make it easier to establish the financial history surrounding your claim.

What About Benefits I Receive While I Cannot Work?

After an accident, an injured person may receive money from different sources, including employment benefits, disability benefits, private insurance, government programs, or accident benefits.

The existence and treatment of these benefits can raise complicated legal issues.

Do not assume that receiving benefits automatically eliminates a claim for lost income or earning capacity, and do not assume that every benefit is treated in exactly the same way.

The applicable insurance policy, legislation, source of the payment and nature of the claimed loss can all matter.

What If I Cannot Work at All?

A person who is permanently or substantially unable to work may face significant long-term financial consequences.

The analysis may include:

• Past lost income;
• Future loss of earning capacity;
• Future care needs;
• Medical and rehabilitation expenses;
• Losses associated with reduced independence; and
• Other damages supported by the evidence and applicable law.

The fact that a person cannot return to their previous occupation does not necessarily mean they are legally incapable of performing every type of work.

The medical and vocational evidence must be examined carefully to determine the person’s actual functional abilities and future employment prospects.

What If My Injuries Make Me Less Competitive in the Job Market?

An important issue in some personal injury claims is the person’s ability to compete for employment in the future.

An injured person may technically be capable of performing a job but still face disadvantages compared with an otherwise similar worker.

For example, an injury may cause the person to:

• Need additional breaks;
• Have restrictions on lifting;
• Miss work because of treatment;
• Be unable to work overtime;
• Require workplace accommodations;
• Have reduced stamina;
• Experience chronic pain; or
• Have other limitations that make maintaining employment more difficult.

These factors may increase the person’s economic vulnerability even when they remain employed.

What Should I Do If I Cannot Work After a Car Accident?

1. Get appropriate medical care.
   Follow your health-care provider’s recommendations and document your symptoms and limitations.
2. Tell your employer about relevant restrictions.
   Follow appropriate workplace procedures concerning medical restrictions and accommodations.
3. Keep employment records.
   Save pay statements, schedules, employment correspondence and records of missed work.
4. Keep financial records.
   Preserve tax returns, benefit information and other documentation showing your income before and after the accident.
5. Document your work limitations.
   Keep track of duties you can no longer perform, reduced hours, missed overtime and other changes.
6. Follow reasonable treatment recommendations.
   Your recovery and efforts to mitigate your losses may become relevant to the claim.
7. Consider obtaining legal advice.
   If your injuries are affecting your ability to work or your future career, a personal injury lawyer can help assess the potential financial consequences.

Do Not Settle a Serious Injury Claim Before Understanding Your Future Losses

Future earning capacity can be one of the most significant components of a serious personal injury claim.

This is especially true for a younger person, a person with a high-income career, a self-employed person, or anyone whose occupation depends heavily on physical or cognitive abilities that have been affected by the accident.

A settlement should therefore be evaluated based on the person’s overall circumstances rather than simply the amount of income already lost.

Before accepting a final settlement, it is important to understand the potential long-term consequences of the injury.

Frequently Asked Questions About Car Accidents and Lost Income

Can I claim lost wages after a car accident in Alberta?

Depending on the circumstances, an injured person may be able to claim compensation for income lost because of accident-related injuries. The claim must be supported by evidence establishing the loss and its connection to the accident.

Can I claim future lost income after a car accident?

A personal injury claim may include compensation associated with future loss of earning capacity where the evidence establishes that accident-related injuries have reduced the person’s ability to earn income in the future.

Do I have to be permanently disabled to claim loss of earning capacity?

No. A person may have a potential loss of earning capacity even if they continue working. Reduced hours, reduced duties, inability to perform overtime, reduced career opportunities or increased vulnerability in the labour market may be relevant depending on the circumstances.

What if I returned to my old job after the accident?

Returning to the same job does not automatically mean that there is no loss of earning capacity. The relevant question may include whether the injury has reduced your ability to perform your work or earn income in the future.

What if I had to take a lower-paying job because of my injuries?

A reduction in income following an accident may be relevant to a personal injury claim if the evidence establishes that the reduction was caused by accident-related limitations. The circumstances must be evaluated carefully.

What if I am self-employed?

Self-employed people can also suffer income and earning-capacity losses after an accident. Establishing those losses may require business records and evidence concerning the person’s role in the business and how their injuries affected their ability to work.

Can a pre-existing injury affect my lost-income claim?

A pre-existing condition can be relevant to causation and damages, but it does not automatically prevent a claim. Medical evidence may be required to distinguish the effects of the accident from pre-existing limitations.

What evidence do I need to prove lost income?

Evidence can include pay statements, tax returns, employment records, medical records, employer information, benefit records, business records and other documentation relevant to your income and work history.

Can I claim if my employer accommodates my injuries?

Potentially. Workplace accommodation may allow an injured person to remain employed while still experiencing reduced earning capacity. The nature and permanence of the limitations and the evidence concerning future employment can be relevant.

How is future loss of earning capacity calculated?

There is no universal formula. The assessment generally compares the person’s probable earning capacity without the accident with their probable earning capacity after the accident, taking into account the evidence and reasonable contingencies affecting the future.

How Moustarah & Company Can Help With an Injury That Affects Your Ability to Work

At Moustarah & Company, our Edmonton personal injury lawyers understand that the financial consequences of an accident can extend well beyond the wages you miss immediately after the collision.

We can help investigate how your injuries have affected your employment, income, career opportunities and future earning capacity.

Depending on the circumstances, this may involve reviewing medical evidence, employment records, income documentation, workplace restrictions, vocational evidence and expert opinions.

Our goal is to ensure that the financial consequences of your injuries are properly identified and supported by evidence when evaluating your personal injury claim.

Learn more about Edmonton personal injury claims
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