How Are Lost Earnings Assessed When a Child Has Suffered a Brain Injury?

A serious traumatic brain injury can be catastrophic. Most children who suffer from serious brain injuries recover the ability to walk and to use their hands, but balance and coordination may be affected for a lifetime. The loss of fine motor control and the early onset of fatigue may limit employability.

More significant for a young brain injury victim is the potential loss of cognitive functioning. Children who suffer from severe (and sometimes moderate) brain injuries may have difficulty processing or retaining information. In other words, the injury impairs the ability to think, to learn, to remember, and to concentrate. Those difficulties may harm a brain injury victim’s ability to find a job in a workforce that is increasingly dependent on mental acuity rather than physical labor.

When a traumatic brain injury results from the negligence of another person, the injured child is entitled to compensation. A substantial portion of that compensation will likely be related to the child’s impaired ability to earn a living. But how are lost future earnings measured when the child is too young to have entered the workforce?

Young Brain Injury Victims and Lost Earning Capacity

When an adult who has started a career suffers from a permanent injury, income loss is reasonably easy to calculate. Lost earnings from the date of the injury to the date of the trial or settlement can be calculated by comparing the injury victim’s earned income prior to the injury to the income (if any) earned after the injury. In the case of a permanent or long-term injury, the loss of future earnings is calculated by projecting that loss into the future over the course of the victim’s expected work life. The calculation must take account of wage increases, anticipated promotions or bonuses, and the present value of future losses, and economists are available to perform those calculations.

When the injury victim is a child, the calculation of lost earnings is more speculative, and therefore more open to challenge. The baseline information that informs an estimate of lost future earnings for adults does not exist because children have no employment history. Whether a child would have become a doctor or a cashier is unknown.

It is nevertheless clear that children who experience lasting brain injuries are entitled to compensation for the loss of future earnings, even if the value of that loss is uncertain. Arriving at that value requires a team effort. The child’s personal injury lawyer will need to work with the child’s neurologist to determine the impact the brain injury will have on the child’s ability to work, with a vocational expert to determine how those limitations will affect employability and earning potential, and with an economist who calculates future income loss based on the vocational expert’s conclusions.

The vocational expert and the economist will be concerned with two factors that are critical to a calculation of lost future earnings. The first is the loss of earning capacity. That factor compares the income the child would likely have earned in the absence of an injury to the income the injured child will likely be able to earn. The second factor is the loss of work life expectancy. That factor recognizes that the number of years a person is able to work is usually reduced as the result of a brain injury.

Loss of Earning Capacity

A vocational expert will begin by making evidence-based assumptions about the child’s earning capacity before and after the injury. Based on information a neurologist provides about the nature and extent of the child’s brain injury, the expert will determine the likelihood that the child will finish high school, will attend vocational school, or will enroll in a college or university. An injury that impairs cognitive ability will often rule out the successful completion of a higher education.

The expert will look at the child’s school performance to gauge the likelihood that the child would have pursued a higher education if the child had not been injured. If the child was in high school, achieved good grades, and expressed a desire for a college education, it will be reasonable to assume that the child would have earned at least a bachelor’s degree. If the child expressed interest in a particular field, such as teaching or medicine, it may be reasonable to assume that the child would have pursued an advanced degree.

The educational achievements of the child’s parents and siblings may also have an impact on the vocational expert’s assumptions, particularly if the child was injured before entering high school. The children of parents with a higher education are statistically more likely to enroll in a college or university. If the child has older brothers or sisters who entered college, it is likely that the injured child would have done so in the absence of the brain injury. In addition to grades, a vocational expert may also look at IQ tests and other achievement tests to determine the probability that a child would continue his or her education beyond high school. Children of average or above average intelligence are more likely to pursue a continuing education than those of below average intelligence.

The likelihood of a post-high school education is important because there is a strong correlation between earnings and education. A middle-aged male with a bachelor’s degree will probably earn twice as much as a middle-aged male with a high school diploma. The earnings gap for women is slightly less, but regardless of gender, the more education a worker has, the greater that worker’s income is likely to be.

Using statistical data, the vocational expert will compare the earning capacity of the injured child before the injury to the child’s earning capacity after the injury. The economist will use that information to make a projection of lost future earnings.

Loss of Work Life Expectancy

A vocational expert can also project the anticipated work life of an average worker. Work life expectancy correlates with the worker’s education. People with a high school diploma often do unskilled physical labor and cannot remain in the workforce as long as skilled workers who have a college degree or a postgraduate education. The more education a person has received, the more likely it is that the person will continue working beyond a conventional retirement age.

Studies demonstrate that individuals who suffer from a cognitive disability have a shorter work life expectancy than individuals who are not disabled. Vocational experts and lawyers rely on statistical data to determine how work life expectancy will be shortened by a cognitive disability. Depending on the degree of education that a person with a cognitive disability may achieve, the disability may be expected to cut the injury victim’s work life in half.

A vocational expert’s coupling of work life projections with reduced earning capacity gives an economist a basis for determining the lost income that can be expected to result from a traumatic brain injury. That, in turn, gives the victim’s personal injury lawyer the evidence that is needed to seek compensation for that component of the child’s income loss over the course of a lifetime.