After a NY Auto Accident: What is Diminished Earning Capacity?

What is Diminished Earning Capacity?

Diminished earning capacity refers to a situation in which an individual’s ability to earn income is reduced or impaired due to a physical or mental disability, injury, illness, or other factors that limit their capacity to work at total capacity. This concept is often associated with legal and insurance contexts, particularly in personal injury or disability claims.

When someone experiences a diminished earning capacity, they may not be able to perform their job as effectively as before or may need to change their occupation entirely. This can decrease their overall earning potential compared to what it would have been without the impairment.

Factors Influencing Diminished Earning Capacity

Factors that influence diminished earning capacity include:

• Nature and Severity of Injuries: The type and severity of injuries sustained in an auto accident play a pivotal role in determining the extent of diminished earning capacity. Catastrophic injuries, such as spinal cord damage or traumatic brain injuries, can have profound and lasting effects on a person’s ability to perform work-related tasks.
• Occupation and Skill Set: The impact on earning capacity can vary based on the individual’s occupation and skill set. For instance, a professional athlete or manual laborer may experience a more substantial reduction in earning capacity if their injuries prevent them from engaging in physically demanding work.
• Age and Life Expectancy: Age is a critical factor, as younger individuals with longer expected work lives may face a more significant loss in earning capacity. Consideration of life expectancy is essential in assessing the ongoing impact of injuries on a person’s ability to generate income.
• Rehabilitation and Treatment Costs: The costs associated with rehabilitation and ongoing medical treatments also contribute to diminished earning capacity. These expenses can divert financial resources from career development or education for a potential career change.
• Expert Testimony: In legal proceedings, our experienced team at Apicella & Schlesinger works with vocational rehabilitation specialists, economists, and medical professionals to provide expert testimony. This testimony is crucial in establishing the extent of diminished earning capacity, offering insights into the long-term consequences of injuries.

How a NY Personal Injury Attorney Can Help

Navigating the legal landscape surrounding diminished earning capacity requires the expertise of seasoned attorneys. At Apicella & Schlesinger, we employ strategic approaches to gather evidence, consult with experts, and negotiate with insurance companies. Our goal is to ensure that our clients receive fair compensation that reflects the actual economic impact of their injuries on future earning potential.