Income Loss Claims
Given that general damage awards are capped in Canada, income loss claims can often make up a sizeable portion of damage awards. Income loss quantification is usually straightforward, particularly when a Plaintiff has had a settled line of work over an established period of time. If they are no longer able to continue working due to a personal injury, their past income loss can generally be calculated and quantified for the duration of time in question.
However, Plaintiffs may choose to continue working following an injury – albeit with more pain and discomfort. They may even work more hours and earn more income over time. Although an income loss claim may not be applicable in such a case, a loss of competitive advantage or loss of earning capacity can still be advanced in many circumstances.
Quantifying Loss of Competitive Advantage
A loss of competitive advantage or earning capacity would be claimed in situations to address one’s inability to compete in the marketplace with other able-bodied individuals with comparable levels of skill, education, or qualifications.
Understanding how to quantify a loss of competitive advantage or earning capacity would require the court to look at how someone’s ability to compete for employment is impaired.
The court’s job in quantifying the loss of competitive advantage or earning capacity will often involve speculation to some degree but will be based on the facts at hand.
As previously discussed on the OTLA Blog, court awards for loss of competitive advantage can appear arbitrary, serving to “undervalue” cases. However, the lack of consistent judicial guidelines for assessing such awards have also led to significant awards in favour of Plaintiffs as well.
For example, in the 2008 case of St.Prix-Alexander v. Home Depot of Canada Inc., the court awarded $400,000.00 for loss of competitive advantage.
In this case, the Plaintiff was seriously injured in a Home Depot store after being struck in the head and neck by a box. At the time of the incident, the Plaintiff was on parental leave intending to return to work as an executive assistant in the public sector within few months. The evidence was that she eventually returned to work and was working 60 hours plus per week at a very stressful job. She received bonuses, worked beyond the call of duty and had the full confidence of her supervisor.
She then moved to another government department where she worked for approximately 4 years. At the suggestion of her doctor, she underwent decompression surgery to her cervical spine due to the incident within this period but continued to work. She was exhausted by the end of each day and her activities at home were very limited. When her boss changed, more demands were expected of her and she was forced to quit, as she could not handle the role.
The Plaintiff then commenced employment with a smaller government department shortly after. Before taking the job there, she had made it known that she needed one day off per week. At first this went well, but after one month, she had a new boss who was not as flexible as the previous one and expected her to be there every day. Three months later she left that employment and applied for long-term disability. By the time she stopped working for good, it had been more than 6 years since the accident.
The court would not award her compensation for income loss between when she went on long-term disability and her expected retirement age. This was because the court was of the view she could have continued working as a public servant in a role with less responsibility given the full time, high stress work she continued to pursue for many years following the incident. However, while rejecting an income loss claim, the court stated:
I have no doubt she has a loss of competitive advantage because of the injuries sustained by her and she will suffer economic loss because of the fact that she can no longer work 60 hours per week and her ability to compete for employment has been impaired. She can no longer accept jobs that demand a lot of concentration and as stressful as an Executive Assistant. She will therefore be less attractive to her employer than a comparable individual not impaired in any way. The fact that she is now unable to work at the Executive 1 or 2 levels in the Public Service is compensable in damages.
Similarly, the 2014 Ontario decision of Gilbert v. South involved a jury award of $250,000.00 to the Plaintiff “for loss of future income, earning capacity and competitive advantage”. This award was made despite the fact that the Plaintiff continued to work post-accident.
These decisions are important to highlight for the fact that a return to work does not disentitle the injured party to claim economic loss in the future if they prove an impaired ability to compete.
More importantly, these decisions affirm the fact that Ontario courts have not ruled out the possibility of sizable damage awards for loss of competitive advantage or loss of earning capacity despite previous court decisions that have had less desirable outcomes for Plaintiffs.