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My Loss of Earnings: A Significant Part of my Claim

As we are going through what is classed as the 'worst recession that anyone can remember', and certainly the largest amount of government borrowing, greater even than the Great Depression, we will all be squeezed in one way or another financially over the next few years. 

It struck me on seeing yet another gloomy forecast on the news last night, that whilst these forecasts are updated on a regular basis and we are told how much the government borrowing is currently set at and what cuts are likely to apply to various sectors, what is not keeping abreast of the recession is the way that calculations are prepared for losses, in particular loss of earnings that arise as a result of an accident.

All accidents can in some way, shape or form be devastating to the person involved as well as those nearest to them. A simple whiplash injury perhaps less so, however where the accident involves significantly greater injuries, injuries to the spine and injuries to the head resulting in brain injuries for example, the losses that can occur will be significant.

It is not always easy to explain how these losses are calculated. The Courts try to award damages for these losses as simply as possible and this must be the right way of dealing with such matters since whilst complex calculations can be prepared, it is much easier for all parties concerned, in particular for the Court where the calculations are kept clear throughout.

In basic terms, you are entitled to recover your losses insofar as they are reasonable.

The Court will generally allow what is termed ‘past losses’, namely those losses that can be established up to the date of any hearing before the Court. These losses are relatively simple to establish. If an injury has resulted in having to stop work you can establish by way of pre-accident wage slips how much the earnings were, show by way of post-accident earnings how much the losses have been as compared to the earnings received prior to the accident and if there are arguments in respect of promotion, try to obtain by way of witness statements what is likely to have occurred on balance had it not been for the accident.

The purpose is of course to try and place the injured party in the same position that they would have been in had it not been for the accident.

All calculations are prepared net. I have had questions asked by clients over the years as to why they should be calculated net rather than gross. The answer is that since the Inland Revenue do not require the injured party to pay tax on compensational damages that they receive, all calculations are therefore prepared net of tax and NI contributions only.

Calculations for the future are however, more difficult to assess. There is a degree of ‘crystal ball gazing’  however this is done on as a scientific basis as possible, always having an eye to what a Judge is likely to consider to be reasonable.

I have dealt in an earlier blog with how the Courts generally calculate future loss namely what losses have occurred as a result of an accident in the future.Tristan Hallam is a partner in Personal Injury in the London office of Russell Jones & Walker. If you or a member of your family has suffered an accident or injury call our expert personal injury solicitors on 0800 916 9046, or email and one of our specialist personal injury team will review your compensation claim for free.