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Overcoming the challenges of proving loss of future earning capacity when you're under-employed or temporarily unemployed

Under Texas law, there's an important distinction between lost future wages and loss of future earning capacity

In Texas, one of the critical factors influencing whether a medical malpractice case is viable or not is future earnings. The reason for this is the damages caps of Texas tort reform laws, which limit the amount of money recoverable in court for someone with low or no earnings versus someone who’s employed.

How does it impact a case when you’re underemployed? Before we tackle this important question, let’s tackle the basics of what you can recover in a medical malpractice case.

What are damages and how do caps work?

Damages are the different categories of money awards that a jury can award to a plaintiff.

Noneconomic damages, including things like the emotional loss of a loved one, pain, suffering, mental anguish, and disfigurement are capped at between $250,000 and $750,000, depending on the facts of the case. In many cases, the cap is $250,000.

Earnings and economic damages

Economic damages aren’t capped, and include things like medical bills, future medical care, loss of past wages, and loss of future earning capacity that are experienced because of the negligent health care at issue.

Importantly, the law doesn’t require a plaintiff to prove future earnings based on past earnings. Instead, what must be proved is future earning capacity, which is basically what the person was capable of earning based on education and experience.

When the plaintiff was an employee at the time of the injury or death, proving loss of future earning capacity is easy. It basically involves collecting W-2 forms and tax returns. An economist reviews these materials and calculates the future anticipated growth of earnings based on the person’s job type, using governmental data.

If the plaintiff was self-employed, underemployed, or temporarily unemployed at the time of the injury or death, proving loss of future earning capacity can be a bit more involved.

We’ve represented several self-employed clients over the years at Painter Law Firm. In many situations, they don’t have W-2 forms or collect a regular salary. Instead, they take draws or withdrawals from the business as needed. Additionally, a self-employed person’s personal taxes may be more difficult to decipher because the returns include deductions for business expenses or losses.

The issue of underemployment brings its own challenges. Underemployment means that a person is employed in a position with less earnings that his or her potential, based on education and/or experience. The same is true for temporary unemployment.

There are lots of reasons that someone may be underemployed at any given time.

When families have children, one parent may be underemployed to help with childcare. A person may take a less-demanding job with fewer hours and less compensation to take care of an aging parent or sick relative.

In these cases, we hire an economist who looks at the whole picture, asking questions like: What was the person’s education level? What was the person’s experience? Did the person have plans for higher employment in the future? The economist expert prepares a report detailing the injured or deceased person’s future earning capacity—meaning what he or she was capable of earning.

Defendants don’t like this type of testimony, even though it’s completely appropriate under the law. Their insurance companies and lawyers routinely argue that it’s speculative and unfair to project lost future earnings based on the legal standard of loss of earning capacity. Instead, you can expect them to argue that the only real numbers on the table relate to a future projection of the current earnings at the time of the serious injury or death.

When possible, I prefer someone other than the injured person or a family member to testify about the cause of under-employment, plans to gain employment that would bring a higher income, and any concrete steps that had been taken in that direction. I find that this is a credible, common-sense way to explain the cause of temporary unemployment that makes sense to a jury. It’s also effective to inoculating the jury to unfair defense arguments.

A top-rated experienced Houston, Texas medical malpractice lawyer can help you with all aspects of your potential case, including how to overcome the challenges of proving future loss of earning capacity.

Robert Painter is an award-winning medical malpractice attorney at Painter Law Firm PLLC, in Houston, Texas. He is a former hospital administrator who represents patients and family members in medical negligence and wrongful death lawsuits all over Texas. Contact him by calling 281-580-8800 or emailing him right now.

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