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Lost Wages

How are lost wages handled in a tort action?

In a personal injury action against an insurance company or defendant, one of the chief responsibilities of an attorney is to adequately gauge with the client what the amount of a settlement or judgment should be (assuming that liability is not in issue). An incredible amount of facts factor into this calculus. The location of the incident, the likability of the plaintiff and defendant, the amount of the medical bills, the permanency of the injuries (if any) — all fair game. One of the most commonly misunderstood factors I find is how much weight is given to lost wages. For instance, say I make $1,000.00 a week pre-tax through my job, and miss six weeks due to someone severely rear-ending me, how are those loss wages considered?

Generally, things like lost wages and medical mills are included as “special damages.” In other words, they are direct and quantifiable losses that arise out of a case. It is much easier to put a dollar amount on these damages rather than “general damages” like pain and suffering or loss of enjoyment of life.

Keep in mind that there is a rational limit to the amount that a judge/jury/insurance company will consider when it comes to lost wages. As with contracts, there is a duty to mitigate losses in an injury claim. A claimant is entitled to be made whole, but in a way that is least expensive/burdensome to the defendant. Therefore, a claimant would have an affirmative obligation to “get better” and return to work when well so as to ensure any claim for lost wages is reasonable and fair. A failure to adhere to this principle can result in a judge/insurance company simply disregarding unreasonable lost wages. (N.B.: in my view, reasonable loss wages are those that bear a fair relationship to an injury or affliction).

Also worth mentioning is that  in Missouri there is some statutory authority on how to address lost wages in certain types of cases. For example, under RSMo 538, lost wages from torts based on improper healthcare (something I do not or cannot handle) are included as an “economic damage.”

At the end of the day, the best way to summarize the treatment of lost wages is to remember that it is a special damage which acts as a key indicator to the monetary amount of a judgment. It should be noted, though, that in jury trials, all bets can be off, because the decision will then rest with a jury and the persuasiveness of an attorney.

See my previous post “Average Weekly Wage” for how wages are relevant in Workers’ Compensation Cases.

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