Overview
In a trial to determine damages of a motor vehicle collision action, the trial judge awarded future lost earning capacity to the plaintiff based on a constant annual loss of $16,749 per year. This finding was successfully appealed and the future lost earning capacity assessment was increased.
Issues
There were two issues on appeal:
- Did the trial judge err by disregarding the evidence of the applicant’s economist, which set out average future earnings for British Columbia women?
- Did the trial judge err by finding that the extent of the applicant’s future earning capacity should be assessed based on a constant annual loss of $16,749 from the date of trial to her prospective retirement at age 70?
Held
The appeal was allowed and the future lost earning capacity award was increased from $463,289 to $1,000,000.
Legal Considerations
When a trial judge makes findings of fact in the assessment of compensatory damages, such findings are owed deference. The standard of review of such decisions is therefore palpable and overriding error.
The British Columbia Court of Appeal concluded that the trial judge made several palpable and overriding errors in the assessment of the appellant’s future earning potential loss.
The quantification of the loss of future earning capacity can be made using two methods:
- The earnings approach is most useful where the loss in question can be more easily measured and involves comparing post-injury earnings to what the injured party would have earned but for the loss.
- The capital asset approach treats a person’s earning capacity as an asset, the value of which has been diminished or destroyed by the injury. The capital asset approach is generally appropriate where a plaintiff has sustained an injury that has led to continuing issues, or that has exposed them to future problems, but has an income at the time of trial that is at or near the level of earnings they enjoyed before the injury.
The trial judge did not follow either approach. The judge’s characterization of the case was more one of loss of earnings since there was a demonstrated loss of earnings.
Issue #1 – Did the Trial Judge Err by Disregarding the Economist’s Expert Evidence?
Yes. The trial judge made at least four palpable and overriding errors in disregarding the economist’s evidence:
- The trial judge mistakenly concluded that the economist’s statistical data related to national averages instead of relevant British Colombia working groups. This conclusion featured heavily in the trial judge’s view of the usefulness of using statistics in assessing damages for past and future lost income.
- The trial judge disregarded the economist’s evidence because statistical averages do not adequately address individual circumstances. Though compensatory damages are individualized and are meant to compensate plaintiffs for their particular losses, in the assessment of damages, it is necessary that perfect not become the enemy of the good. The Court of Appeal stressed that judges must do what they can with the evidence before them to reach an estimate of the loss that is reasonable and fair in the circumstances. Statistical data is often the best evidence available and is used in assessing damages is consistent with precedent.
- The trial judge’s comment that statistical data was “general” and did “not adequately address individual circumstances” was not in accordance with the undisputed evidence. The applicant’s pre-accident income was very close to the averages set out in the economist’s report.
- The trial judge’s conclusion that the economist’s evidence was “weakened to the extent he accepted the plaintiff suffered a mild traumatic brain injury” was also a material error. The evidence was that the economist did not opine on the impact of the appellant’s limitations might have. He was just hired to do the math.
The Court of Appeal accepted this first ground of appeal.
Issue #2 – Did the Trial Judge Err in His Assessment of the Appellant’s Loss of Future Income Earning Capacity?
The trial judge concluded that the appellant’s loss of future earning capacity should be assessed on a constant annual loss of $16,749. There was no reasoned analysis to support this conclusion. The judge already made errors in disregarding the economist’s evidence. The trial judge’s discretion in reaching this number was made on an erroneous basis.
The question becomes whether the court can reassess the damages owing to the appellant. As I reviewed above, where there has been a material error, it is open to an appellate court to substitute its own view on the question at issue, as far as, and only as far as, the record permits it to do so.
#3 – Reassessment of Damages
The court can give any order that could have been made by the trial judge and may draw inferences of fact and exercise any original jurisdiction that may be necessary in determining an appeal.
Appellate courts will reassess damages where the error in question is discrete; the record, including unchallenged findings of fact, is sufficient to allow this court to reach its own conclusion without engaging in speculation; and the interests of justice strongly weigh against ordering a new trial. The pre-requisites were met in this case and the Court of Appeal was free to proceed.
Conclusion
The assessment of damages for loss of future earning capacity is not a mathematical calculation and damages awards must be ultimately reasonable and fair. This is a discretionary exercise. The award was raised to $1,000,000.
