It is so easy to focus on the issue of liability when preparing to defend a claim for personal injury that the importance of obtaining the reliable (usually multi-disciplinary) expert evidence required to defend claims for lost earning capacity is often overlooked, despite economic loss often being the largest single head of damage claimed.

The result is often significant difficulty when attempting to negotiate an early settlement, or later in CARS or at trial when expert evidence to defend earning capacity is required.

The defendant bears the evidentiary onus of proving residual capacity to earn

While the Plaintiff bears the legal onus of proving loss of earning capacity the Defendant bears the evidentiary onus of establishing that there is a real residual earning capacity and it’s likely value.

“…it is not incumbent upon the injured plaintiff to prove what employment he or she ‘is not incapacitated from performing’. It is for a defendant which contends that the plaintiff has a residual earning capacity to adduce evidence of what the plaintiff is capable of doing and what jobs are open to such a person:” see: Raby v Bristow [2005] NSWCA 199 at [73]

“The real defendant [insurer] must have resources from which evidence can be produced to show what sort of employment is within the residual capacity of an injured litigant, and what sum it is likely to produce.  It has, in my view, an evidentiary burden requiring it to adduce material of this kind.” See Kallouf v Middis [2008] NSWCA 61 at [53] citing  Linsell v Robson [1976] 1 NSWLR 249 (at 254 – 255).

Factual elements

To meet that evidentiary burden the following factual elements must be proved:

1. Residual physical and medical capacity to engage in work, and
2. Residual psychological capacity to engage in work, and
3. Restrictions required to allow the residual capacity to be safely exercised, and
4. Vocational capacity, based on training, education and experience and the transferrable skills acquired which could be applied to other employment, and
5. Real specific jobs which are shown to match the established residual capacities, restrictions and transferable skills, and
6. Evidence of the existence of those specific real jobs in the relevant labour market, and
7. Evidence of earnings.

Proving the factual elements

Proving the factual elements is a multidisciplinary exercise that, depending on the nature of the claim, may involve a number of expert consultants and the careful integration of the following:

• Assessments by occupational physicians of residual physical capacity to perform work relevant tasks
• Assessments by psychiatrists and psychologists of residual psychological capacity to perform work relevant tasks
• Assessments by vocational assessors of education, training, experience and transferrable work skills
• Identification of work options that are suitable having regard to some or all of the above factors and potentially other factors including place of residence.
• Assessments of labour market activity and earnings

Real and not hypothetical jobs and earnings

The authorities are also clear that the jobs, occupations and earnings a Defendant points to in meeting this evidentiary onus must be real jobs that the Plaintiff could obtain and not merely represent a hypothetical capacity.

For that reason the jobs must be clearly specified, shown to be consistent with the Plaintiff’s residual capacity, shown to exist and be available to the Plaintiff in the open and reasonably accessible labour market, and have evidence of earnings. 

A mere reference to a capacity for some unspecified “suitable sedentary duties” does not meet the evidentiary onus.

Failure to meet the onus and Buffers

As with any party who has and fails to meet an evidentiary onus, the consequences are usually an adverse decision on the issue, and the effective loss of any right of review either on Appeal or by way of administrative law review.

In many cases in which large “buffers” are awarded to the dismay of Defendants, the rights to effective review are lost because inadequate evidence was called on this issue.

Summary

With courts making large “buffer” awards for economic loss, it is more important than ever to ensure that you have reliable and sound expert evidence relevant to claims of loss of earning capacity. 

ECA has a long history of providing solicitors and their clients with assistance in identifying the types of evidence that may be helpful in assessing claims for loss of earning capacity. 

For full details of our earning capacity assessment services call 1300 72 34 71 or visit www.ecapacity.com.au