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Loss of Future Earning Capacity

Prior to sustaining injuries in a motor vehicle collision I was an independent contractor working in a highly competitive and demanding industry, however, since the collision I can no longer deliver the standard of service my clients expect. How will the court compensate me for my loss?

In the case of White v. Bysterveld (2016 BCSC 19523) Justice Pearlman was tasked with assessing the damages sustained by  a Vancouver costume designer for theatre, film and television. The 53-year-old plaintiff argued that as a result her injuries, which included persistent neck pain, psychological injuries and cognitive impairment, she had suffered a permanent, partial disability that impaired her capacity to earn income as a costume designer. In assessing the plaintiff’s lost earning capacity, Justice Pearlman balanced several factors including, the variation in the plaintiff’s income as a independent contractor, the plaintiff’s retirement age, the importance of the plaintiff’s reputations in the industry, the volatility of the industry’s market conditions, and the plaintiff’s pre-existing conditions (prior stroke and lupus diagnosis). In navigating this myriad of contingent factors Justice Pearlman made the following comments:

[237]     The plaintiff’s position that her future her loss of income earning capacity should be assessed at $845,000 on the loss of earnings approach assumes she would perform only the most profitable work and would do so for 10 months of each year until age 75.  With respect, this is an unrealistic “best possible case” scenario that fails to take into account fluctuations in the work available to the plaintiff and the probability that, absent the accident, as she aged she would not be able to sustain the 10 to 15 hour days required for major film and television production work.

 [238]     The plaintiff is an independent contractor. Her income varies with the state of the film industry and the economy, the value of the Canadian dollar and the mix of film, television and theater work she applies for and obtains in any given year. In my view, these factors render the plaintiff’s claim more amenable to assessment on the capital asset approach than the loss of earnings approach.

 [239]     As a result of the defendant’s negligence, the plaintiff has been rendered less capable overall of earning income in her profession.

 [240]     According to both Mr. Adair and Ms. Bird, at the time of trial the plaintiff continued to enjoy a reputation as a talented costume designer with an impressive resume. However, with the passage of time, as she continues to turn away opportunities to compete for large feature film productions and American television series, her reputation may fade, and attract less work in a highly competitive industry. The plaintiff’s irritability and compromised organizational and decision-making capacity render her less marketable or attractive to potential employers. Ms. White testified she has already had a falling out with a Vancouver theater company that had frequently engaged her as a costume designer. As a result of complaints about both her temperament and to work, she is pessimistic about the prospects for that company retaining her again.

 [241]     The plaintiff has suffered an impairment of her ability to take advantage of all of the job opportunities which might have been open to her had she not been injured.  Further, the plaintiff’s depressive symptoms and attendant lack of motivation, together with her cognitive deficits render Ms. White less valuable to herself in a competitive and demanding industry.

 [242]     I turn now to a consideration of the contingencies, both positive and negative.

 [243]     On the positive side, there is a real chance that the plaintiff’s anxiety and depressive symptoms will improve with treatment, which would assist Ms. White in rekindling her motivation and creative drive. Attendance at a multi-disciplinary pain clinic will probably assist the plaintiff in coping with her chronic pain.

 [244]     Since the accident, the plaintiff has, on occasion, worked 10 to 14 hour days. If her capacity to manage her pain improves along with her mood and emotional functioning, she may see some improvement to her ability to cope with the demands of her work. However, the deficits in her cognitive functioning will likely persist.

 [246]     On the negative side of the ledger, there is a real and substantial possibility that the plaintiff’s worsening and unrelated wrist and hand pain may impair her ability to work. There is also the chance, which I have assessed at 10%, that the plaintiff’s degenerative spinal condition, pre-disposition to migraines, hypertension and pre-existing sources of light sensitivity may interfere with plaintiff’s physical and cognitive functioning, and curtail her ability to work long hours, or to work to age 65 or beyond.

 [247]     The plaintiff testified she never planned to retire at age 65 and lead evidence that in the film and theatrical industries it is not uncommon for talented senior designers to work into their 70s. But for the accident, the plaintiff might have done so.  However, there is also a real chance Ms. White would have chosen to retire at or before age 65. Work for major productions takes a toll. It demands long hours and is often stressful. The plaintiff would likely have chosen to scale back her work before retirement.

 [248]     Opportunities in the British Columbia film industry fluctuate with the state of the economy and the exchange rate of the Canadian dollar. As the defendant submits, those factors are beyond the control of the plaintiff.

 [249]     The plaintiff must compete for her work in film and television. She has no assurance she will actually receive a project until she is hired. Much depends upon maintaining a current reputation for creative, timely and efficient work. As I have previously noted, as a result of turning down a number of large film and television productions, the plaintiff risks the erosion of her reputation and the loss of some competitive advantage.

 [250]     Earlier in these reasons, I found that, but for the accident, Ms. White would have had the capacity to earn about $75,000 in each of the years 2012 through 2015.

 [251]     On the capital asset approach, and taking into account all the factors I have considered, I assess the plaintiff’s damages for future loss of earning capacity in the amount of $225,000.  I conclude that an award equivalent to three years’ annual earnings of $75,000 is fair and reasonable in the circumstances of this case.