Impairment of Future Earning Capacity in Indiana Motorcycle Accident Cases

A serious motorcycle accident can affect far more than a person’s immediate medical expenses and time away from work. When an injury permanently limits a person’s ability to perform a job or compete for employment, the financial consequences may continue for years or even decades.

Under Indiana law, impairment of earning capacity can be a recoverable element of damages in a personal injury case. This type of claim is particularly important in motorcycle accident cases involving permanent orthopedic, neurological, or other injuries that affect a person’s ability to work.

Importantly, impairment of earning capacity is not necessarily the same thing as lost wages. A person may return to work after a motorcycle accident and still have suffered a permanent reduction in his or her ability to earn income.

What Is Future Earning Capacity?

Future earning capacity generally concerns the effect an injury has on a person’s ability to earn money in the future. Indiana courts distinguish this concept from simply calculating the wages a person missed while recovering from an accident. In Scott v. Nabours, the Indiana Court of Appeals explained that impairment of earning capacity involves the adverse effect of an injury on a person’s ability to engage in his or her vocation. The court recognized that evidence must connect the injury to the person’s inability or diminished ability to perform that vocation. This distinction is important in an Indiana motorcycle accident claim.

For example, imagine that a construction worker earns $80,000 per year before a motorcycle crash. The worker suffers a permanent back injury and eventually returns to employment, but can no longer perform heavy lifting, climb scaffolding, or perform other essential construction tasks. The worker’s return to employment does not necessarily mean there is no claim for impairment of earning capacity. The relevant question may be whether the accident has permanently reduced the person’s ability to earn income compared with what that person could have earned had the accident not occurred.

Lost Wages vs. Loss of Future Earning Capacity

One of the most important distinctions in an Indiana personal injury case is the difference between past lost wages and future impairment of earning capacity. Past lost wages generally concern income the plaintiff actually lost because of time away from work following the accident. Future earning capacity is broader. It concerns the effect of the injury on the person’s ability to earn in the future.

The Indiana Courts addressed this distinction in Rieth-Riley Construction Co. v. McCarrell, explaining that earning ability and the economic value of a person’s time and capacity to work may be compensable even though they are not necessarily reflected in a simple calculation of wages already lost.

This can become particularly important when a motorcycle accident victim: Returns to work but earns less money; Can no longer work overtime; Cannot perform physically demanding duties; Is transferred to a lower-paying position; Has to change occupations; Loses opportunities for advancement; Cannot work the same number of hours; Requires workplace accommodations; Can no longer perform a specialized trade; or Has permanent restrictions that reduce available employment opportunities.

Can You Recover Loss of Earning Capacity If You Returned to Work?

Potentially, yes. Returning to work does not automatically eliminate an Indiana claim for impaired earning capacity. The issue is not simply whether the injured person has a job. The issue is whether the injury has impaired the person’s ability to earn. For example, suppose a motorcycle accident victim worked as a commercial electrician before the crash. Following a permanent shoulder injury, the person returns to work but can no longer perform overhead electrical work and must accept less physically demanding assignments. The person may still be employed and receiving a paycheck. But if the injury has diminished the person’s vocational opportunities or earning ability, evidence of that impairment may be relevant to a claim for future earning capacity. At the same time, Indiana courts require evidence supporting the claimed impairment. A permanent medical diagnosis, standing alone, does not automatically establish a loss of earning capacity.

Indiana Law Requires Evidence Connecting the Injury to the Loss

Indiana case law makes clear that a plaintiff must establish a connection between the injury and the claimed impairment of earning capacity. In Scott v. Nabours, the Indiana Court of Appeals emphasized the need for evidence demonstrating that the injury affects the person’s ability to engage in his or her vocation. The court later applied similar reasoning in Sony DADC US Inc. v. Thompson, explaining that an instruction concerning lost earning capacity must be supported by evidence establishing the necessary connection between the injury and the plaintiff’s vocational limitations. This is why medical evidence alone may not tell the entire story. A physician might establish that a motorcycle accident caused a permanent limitation in lifting or shoulder movement. But the case may also require evidence explaining what that restriction means for the plaintiff’s particular occupation.

How Is Future Earning Capacity Proven in Indiana?

There is no single formula that applies to every Indiana personal injury case. The evidence will depend on the person’s age, occupation, education, work history, medical restrictions, earning history, and anticipated career path. The evidence must include:

• Medical Evidence: Medical testimony can establish the nature and permanence of an injury and may address restrictions involving: Lifting; Carrying; Standing; Walking; Sitting; Bending; Reaching; Climbing; Gripping; Repetitive movements; Balance; and Other physical requirements of the person’s occupation.
• Employment Records: Employment and financial records may establish the person’s pre-accident earning history. These records can include: W-2 forms; Tax returns; Pay stubs; 1099 forms; Employment contracts; Bonus records; Commission records; Overtime records; Performance evaluations; Promotion history; and Evidence of career advancement.
• Vocational Evidence: A vocational expert may evaluate how the person’s permanent restrictions affect the ability to return to the previous occupation. For example, a vocational expert may consider whether a construction worker with permanent lifting restrictions can realistically return to construction work or whether the person must pursue a different occupation.
• Economic Evidence: An economist may evaluate the financial consequences of reduced earning capacity. Depending on the facts, an economic analysis may consider: Historical earnings; Expected future earnings; Age; Work-life expectancy; Education; Career progression; Fringe benefits; Inflation; Potential raises; Post-injury earning ability; and Other relevant economic factors.

Indiana Courts Recognize That Future Earnings Cannot Be Calculated With Perfect Precision

A claim for future earning capacity necessarily involves some uncertainty. Nobody can know exactly how much a person would have earned over the next 10, 20, or 30 years. Indiana courts recognize this reality. In Escamilla v. Shiel Sexton Co., the Indiana Court of Appeals discussed the difficulty of measuring future earning capacity and recognized that the factfinder may consider circumstances such as the plaintiff’s age, health, occupation, life expectancy, abilities, training, experience, and potential for increased skill. At the same time, Indiana law does not permit a future-loss claim to rest entirely on speculation. The evidence must provide a reasonable basis for the jury to determine the economic consequences of the injury.

What Does Age Have to Do With Future Earning Capacity?

Age can be an important consideration in evaluating future earning capacity. A permanent injury suffered by a 25-year-old worker may affect many anticipated years of employment. A similar injury suffered by someone approaching retirement may involve a different period of potential future employment. Indiana’s decision in Escamilla recognizes age and life expectancy among the factors that may be considered in evaluating future earning capacity. This does not mean that a younger plaintiff automatically has a greater claim. Rather, age can be one factor used to evaluate the duration and potential economic consequences of an impairment.

Motorcycle Accident Injuries and Physical Occupations

The issue of future earning capacity can be particularly significant following a motorcycle accident. Motorcycle collisions can result in serious injuries involving: Spine; Neck; Back; Shoulder; Arm; Wrist; Hand; Hip; Knee; Leg; Foot; or Brain and nervous system. When those injuries create permanent functional restrictions, the consequences may extend into the workplace. For someone whose occupation requires physical labor, even a seemingly narrow restriction can have substantial vocational consequences. A warehouse employee who cannot repeatedly lift 50 pounds may no longer be able to perform the same job. A construction worker who cannot climb or carry heavy materials may have difficulty returning to the same trade. A mechanic with permanent hand or shoulder limitations may be unable to perform certain repairs. A truck driver with significant restrictions on prolonged sitting may face limitations in the type or amount of driving he or she can perform. The important question is not simply what medical condition the plaintiff has. The question is how that condition affects the person’s ability to earn a living.

What If the Injury Forces a Career Change?

A motorcycle accident can sometimes force an injured person to abandon a career built over many years. For example, a skilled tradesperson may have spent decades acquiring certifications, experience, and specialized knowledge. If a motorcycle accident makes the physical requirements of that trade impossible, the person may have to seek entirely different employment. That career change can have economic consequences even if the person eventually finds another job. The new occupation may pay less. It may offer fewer opportunities for advancement. It may have fewer benefits or less opportunity for overtime. Indiana case law recognizes that the adverse effect of an injury on a person’s vocation is central to the concept of impaired earning capacity.

Does a Person Have to Be Completely Unable to Work?

No. An impaired-earning-capacity claim does not necessarily require proof that the plaintiff is permanently unable to work. A person may remain employed while suffering an impairment in earning capacity. For example, an injured worker may be able to work eight hours per day but no longer be capable of overtime. Another worker may remain employed but only in a position that requires fewer physical duties and offers less opportunity for advancement. The evidence must establish the actual effect of the injury on earning ability.

Can an Unemployed Person Claim Impaired Earning Capacity?

Indiana law does not automatically exclude an unemployed person from pursuing a claim for impairment of earning ability. In Rieth-Riley Construction Co. v. McCarrell, the Indiana Court of Appeals recognized that unemployment at the time of an injury does not necessarily eliminate the value of a person’s earning ability. This can be relevant in cases involving: People between jobs; Students; Individuals entering the workforce; Self-employed individuals; People changing careers; and Others whose economic circumstances are not adequately reflected by a current paycheck. The important consideration remains the evidence demonstrating the person’s earning ability and the injury’s effect on that ability.

What Evidence Should Be Gathered After an Indiana Motorcycle Accident?

If a motorcycle accident causes a potentially permanent injury, preserving evidence concerning future earning capacity can be important.

Depending on the circumstances, that evidence may include the following: Medical records; Physician restrictions; Functional-capacity evaluations; Vocational assessments; Employment records; Tax returns; W-2s and 1099s; Pay stubs; Overtime records; Bonus and commission records; Job descriptions; Performance evaluations; Professional certifications; Educational records; Evidence of promotions or anticipated promotions; Testimony from supervisors and co-workers; and Economic or vocational expert opinions. The sooner these issues are identified, the easier it may be to document the relationship between the injury and its long-term vocational consequences.

Indiana Case Law Concerning Future Earning Capacity

Several Indiana appellate decisions are particularly relevant to claims involving impairment of earning capacity:

In Scott v. Nabours, 156 Ind. App. 317, 296 N.E.2d 438 (1973), is an important Indiana case addressing impairment of earning capacity. The court distinguished earning capacity from ordinary lost earnings and emphasized the need for evidence connecting the injury with the plaintiff’s ability to perform his or her vocation.

In Rieth-Riley Construction Co. v. McCarrell, 163 Ind. App. 613, 325 N.E.2d 844 (1975), the court addressed the value of earning ability and recognized that impairment of earning capacity can constitute a compensable loss even though it is not identical to wages actually lost.

In Barker v. Cole, 396 N.E.2d 964 (Ind. Ct. App. 1979), the Indiana Court of Appeals addressed the evidentiary foundation necessary for future economic damages and the prohibition against awards based merely on speculation or conjecture.

In Dunn v. Cadiente, 516 N.E.2d 52 (Ind. 1987), the Indiana Supreme Court addressed the distinction between lost earnings and impairment of earning capacity and the evidence relevant to determining that loss.

In Berman v. Cannon, 878 N.E.2d 836 (Ind. Ct. App. 2007), provides additional discussion concerning economic evidence relevant to future earning capacity.

The case of Escamilla v. Shiel Sexton Co., 73 N.E.3d 663 (Ind. 2016), is particularly useful when discussing future earning capacity because the court addressed the difficulty of calculating future losses and the types of evidence that may be considered, including age, health, occupation, life expectancy, abilities, training, and experience.

In Sony DADC US Inc. v. Thompson, 48 N.E.3d 80 (Ind. Ct. App. 2016), the court emphasized the need for evidence connecting an injury to an inability to engage in the plaintiff’s vocation before the issue of lost earning capacity can properly be submitted to a jury.

What Should You Do After a Motorcycle Accident?

If you have suffered a serious injury in a motorcycle accident in Indiana, it is important to consider not only your immediate medical expenses and lost wages, but also the possibility that the injury could affect your ability to earn income in the future. A permanent injury may affect your career even if you are able to return to work. Evidence concerning your occupation, medical restrictions, employment history, education, training, earnings, and future career opportunities can all be important when evaluating an impairment-of-earning-capacity claim. An attorney from the Gladish Law Group can review the facts of the accident and the resulting injuries and determine what categories of damages may potentially apply to your case.

Frequently Asked Questions About Future Earning Capacity in Indiana

Is loss of future earning capacity the same as lost wages? No. Lost wages generally concern income actually lost, because of time away from work. Impairment of future earning capacity concerns the effect an injury has on the person’s ability to earn in the future.

Can I claim impaired earning capacity if I went back to work? Potentially. Returning to work does not automatically eliminate a claim. The relevant question is whether the injury has impaired the person’s ability to earn or perform his or her occupation.

Do I need an economist to prove future earning capacity? Indiana case law recognizes that both expert and non-expert evidence may be relevant. Whether an economist or vocational expert is appropriate depends on the facts of the individual case, but in most cases, it would be important to prove that element of your claim.

Do I have to prove exactly how much money I would have earned? Future earning capacity cannot ordinarily be calculated with mathematical certainty. Indiana law nevertheless requires sufficient evidence to provide a reasonable basis for determining the loss and does not permit damages based solely on speculation.

Does a permanent injury automatically establish lost earning capacity? No. Indiana law requires evidence connecting the injury to an impairment in the plaintiff’s ability to work or earn.

Can a motorcycle accident affect my earning capacity even if I can still do some work? Yes. A person does not necessarily have to be completely unable to work. Permanent restrictions that reduce occupational opportunities, earning ability, hours, overtime, or career options may be relevant.

Talk With an Indiana Motorcycle Accident Attorney From the Gladish Law Group

The financial consequences of a motorcycle accident can continue long after the medical treatment ends. If you suffered a permanent injury, it is important to consider whether that injury has affected—or may affect—your ability to work and earn income in the future. Indiana law recognizes impairment of earning capacity as a potential component of personal injury damages when supported by appropriate evidence. If you or a family member has been seriously injured in a motorcycle accident, an Indiana personal injury attorney can evaluate the medical, vocational, employment, and economic evidence involved in the claim.

The Gladish Law Group represents individuals injured in motorcycle accidents and other serious personal injury cases throughout Indiana. Contact our office to discuss your case and learn more about your potential legal rights and remedies.

This article is provided for general informational purposes and does not constitute legal advice. The law may change, and the application of Indiana law depends on the facts and circumstances of each individual case.