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Pre – crash earnings history and past loss of income

In the years leading up to a crash I am struggling to make money and have very low earnings.  I start up a business two weeks before a crash and am optimistic that it will succeed.  If crash injuries take the wind out of my income earning sails, will ICBC be able to point to my poor earnings history and say I wouldn’t have earned much money anyway?

In the January 25, 2016 judgment  in Beardwood v. Sheppard, 2016 BCSC 100 (http://www.courts.gov.bc.ca/jdb-txt/sc/16/01/2016BCSC0100.htm) the plaintiff argued that it was reasonable that, due to the injuries sustained in a April 13, 2012 crash, he lost at least $25,000.00 of earnings in each of the four years immediately following the crash. The plaintiff had started a new business two weeks before the crash and was unable to show how much of his losses were due to start up costs or what work he lost as a result of the crash. Defence counsel argued that because of this, the court should use the pre – crash earnings to determine what he would have earned had the crash not occurred. Mr. Justice Weatherill disagreed, and assessed income loss over those four years at $100,000.00:

[110]     In my view, the plaintiff’s average pre-MVA earnings are not indicative of what he would have earned during the period 2012 to 2015, inclusive, had the MVA not occurred.  I find that the plaintiff’s pre-MVA  earnings were disrupted by events that resulted in his income being less than would otherwise have been the case.  He lost his driver’s licence from 2006 to mid-2012 for driving while intoxicated.  Mr. Western testified that, as a result, he was paid less than he would have been paid had he had a licence.  In addition, one of the plaintiff’s employers went bankrupt.  As well, the plaintiff sustained a low back injury that resulted in him being off work in 2009 for at least six months.  He was also laid off from time-to-time due to a slowdown in the glazing industry.  Throughout, the plaintiff demonstrated a consistent desire and ability to find work.  He was motivated and physically and mentally fit for the job.  Less than two weeks before the MVA, he started his own company.  He led evidence that, as a result of the MVA, he was unable to do anything other than light work and had to turn down other work in its entirety because of his injuries.

[111]     I find that there is a real and substantial possibility that, but for the MVA, the plaintiff would have earned substantially more than his pre-MVA average earnings. 

[112]     I assess the plaintiff’s past loss of income and opportunity to earn income at $25,000 per year for the four year period of 2012 to 2015, inclusive, for a total gross income loss of $100,000.

[113]     However, because the plaintiff was self-employed, his gross income must be reduced by the appropriate amount of income tax and Employment Insurance premiums that he would have had to pay.  The plaintiff filed the expert report of Mr. Curtis Peever, an economist, which provides opinion evidence on the Laxdal calculations that can be used in this regard (at p. 34 of his report).  Because the plaintiff’s actual “with MVA” income figures are net of income tax, for simplicity I have chosen to reduce his award only by the amount of income tax/Employment Insurance he would have paid on the additional $25,000 per year, which according to Mr. Peever’s tables is approximately 8.8% per year. 

[114]     Accordingly, the plaintiff is entitled to an award of $91,200 under this head of damages.

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