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Assessment of Loss of Earning Capacity

If a loss of capacity is supposed to be an assessment, not a calculation, is there a need for economic evidence?

In Dunbar v. Mendez, (2016 BCCA 211), the trial judge assessed the plaintiff’s loss of capacity to earn income at $400,000.00, and did so without having been armed with economic evidence.  On appeal, our British Columbia Court of Appeal clarified the fact that the use of economic evidence does not turn an assessment into a calculation, but rather provides important evidence with which to inform the assessment:

[20]         The utility of this kind of evidence to the assessment of damages has been recognized often by this Court because it reflects the fact that an award for loss of future earning capacity, even when measured using the capital asset approach, is not simply at large: Morgan v. Galbraith, 2013 BCCA 305 at para. 56; Schenker v. Scott, 2014 BCCA 203 at para. 53. Such aids provide helpful context to the application of the factors from Brown, by identifying in a general sense the magnitude of the plaintiff’s loss: Jurczak v. Mauro, 2013 BCCA 507 at paras. 33 37.

[21]         The assessment of future loss requires a court to estimate a pecuniary loss by weighing (even if not assigning specific numeric values to) possibilities and probabilities of future events and relating evidence and findings of fact to the quantification of the loss: Schenker at paras. 53, 69; Ostrikoff v. Oliveira, 2015 BCCA 351 at para. 29;Tsalamandris v. McLeod, 2012 BCCA 239 at paras. 53 55. The usefulness of economic and statistical evidence does not turn an assessment into a calculation. It does, however provide a useful tool to assist in determining what is fair and reasonable in the circumstances: Parypa v. Wickware, 1999 BCCA 88 at para. 70.

The Court of Appeal carefully reviewed the evidence at trial and performed an independent assessment of the plaintiff’s loss of capacity, resulting in the reduced award of $250,000.00.