If another party caused you a personal injury by committing a negligent or intentional act, you might be entitled to compensation for your pain, suffering and any related loss of earnings.
A claim for loss of earnings is usually made in cases where the injured person has to take time off work during recovery. Moreover, if you or a loved one has suffered a severe injury that has resulted in a disability, you may not be able to return to work at all or have to take a lower-paying job.
If you make a successful compensation claim, you are entitled to recover all reasonable losses incurred due to your accident. These include both past and future loss of earnings, including bonuses, overtime, loss of pension and any other income you have lost.
Do I have a valid claim for loss of earnings?
Being unable to work due to an accident or illness can add further stress and suffering to you and your loved ones. In certain circumstances, you might be eligible to claim for loss of earnings and receive compensation for the financial losses caused by your inability to work. As a general rule, a loss of earnings claim should be possible if:
- Another person or entity, namely the defendant in your legal case, owed you a duty of care
- They breached their duty towards you by committing a negligent or intentional act
- You suffered an injury or illness as a result within the last three years
- That has affected your ability to work, leading to a loss of earnings
You do not have to worry about proving that the other side had a duty of care towards you. If your case has merit, your personal injury solicitor will know what legislation applies to your circumstances and will help assess liability. They will ensure you are fully compensated for your financial losses and guide you throughout all the steps of the claims process.
How can I claim compensation for lost income?
If you have suffered a personal injury that has resulted in a loss of earnings, you might be entitled to compensation. Here are some steps you can take to claim compensation for lost wages as part of your claim:
Seek medical attention: This will ensure that you receive the necessary treatment and create a medical record of your injuries, treatments received and recovery prospects.
Contact a personal injury lawyer: Contact a personal injury lawyer who can assess your claim and advise you on the best course of action.
Gather evidence: Collect evidence to support your claim, such as:
- Employment records: These may include your employment contracts, payslips, and tax returns. You should also keep a record of your period of absence from work, as well as overtime, promotions and other opportunities you have missed out on due to your injury. Bank statements, wage slips or a copy of your most recent P60 could all support your claim.
- Expert reports: In some cases, you may need to obtain an expert report to support your claim. For example, if you are self-employed, you may need to provide an expert report from an accountant to demonstrate your loss of earnings.
- Witness statements: If there were witnesses to the incident that led to your loss of earnings, their statements could be used to support your claim.
- Any other relevant documentation: This could include photographs of the accident scene and your injuries, accident report forms, police reports, as well as any other documentation that supports your case.
Submit your claim: Your solicitor will help you prepare and submit your loss of earnings claim. Based on the available evidence, they will know exactly how much you should be entitled to recover and will help you get the best compensation possible.
Negotiate a settlement: If the other party accepts liability, your solicitor will negotiate a settlement on your behalf. If they deny any responsibility, your lawyer will be prepared to take legal action and argue your case before a judge.
It is important to note that the process of making a claim for loss of earnings can be complex and time-consuming, and it is recommended that you seek the advice of a qualified personal injury lawyer to help you throughout the process.
What can be included in a loss of earnings claim?
Besides the pain and suffering caused by an injury or illness, loss of earnings is one of the most common damages people seek in a personal injury claim. In most cases, the income lost during recovery is unlikely to be high, but an ongoing injury or disability can lead to substantial financial losses.
Your claim can include any reduction in wages related to your injury, such as:
- Lost net earnings: Net earnings refer to the amount of income an individual receives after taxes and other deductions have been taken out. In other words, it is the actual amount of money you receive in your bank account for your job.
- Bonus payments: When calculating your compensation award, bonus payments can be included if they are a regular and expected part of your income. If the bonus is guaranteed, it can be recovered in a loss of earnings claim. However, if this is discretionary or not guaranteed, including it may be more difficult.
- Loss of commissions and overtime: Many employees earn additional income through working overtime or receiving commissions on sales. If you regularly received commissions or overtime payments before your accident, these can be factored into calculating your compensation award.
- Loss of pension: If your injuries prevented you from working for an extended period and affected your retirement benefits, you have a right to be reimbursed for the loss of pension.
- Sick days and holiday days: If you had to use up your sick days or were unable to take your entitled holiday days due to your accident or illness, you can recover these in your loss of earnings claim.
- Other opportunities to top off your usual earnings: These refer to any additional income or opportunities for income that you may have missed out on due to your injury. For example, if you were planning to work a second job or take on extra shifts or had a side business or investment that was impacted by your accident, you might be able to claim for the lost earnings from that as well.
How is loss of earnings calculated in personal injury claims?
A loss of earnings claim will only include your lost net earnings, which is the amount you would usually receive after tax and other deductions such as health insurance. Your solicitor will work out how much you earn a day and multiply that figure by the number of days you have been absent from work.
If you receive Statutory Sick Pay during your absence, a tax refund or any payment covered by your employer’s sick pay policy, these will be deducted from your final compensation. Calculating your loss of earnings can be challenging, but your solicitor will work closely with you to gather evidence of your losses as quickly as possible.
In straightforward claims, where you only need to calculate the past loss of earnings, it will usually be enough to provide evidence such as wage slips, P60s, P45s, tax returns, and other documents that show how much you earned before the injury.
To calculate your future loss of earnings, the future earning capacity is assessed based on factors such as age, occupation, education, skills, work experience, and the severity of the injury. Your solicitor will also include any potential promotions or career advancements you would have had if you had not been injured.
Can I claim for lost income if I am self-employed?
Individuals who are self-employed and have suffered an injury or illness that has resulted in them being unable to work could also be eligible to claim for loss of earnings.
In many industries, such as building and construction, it is a common practice to hire contractors and self-employed workers, such as plumbers and electricians, to work on specific projects. Nonetheless, employers have a duty of care towards all employees, whether they work permanently, as contractors or freelancers.
That means they must follow legislation such as the Health and Safety at Work etc. Act 1974 and other applicable UK laws to ensure employees work in a safe environment that does not pose health and safety risks. While a claim for loss of earnings may be more complex for the self-employed, you might be able to claim compensation in situations such as:
- Lack of proper equipment for the job
- Receiving faulty equipment or machinery to carry out your work tasks
- Lack of or insufficient training
- Not being given suitable protective equipment such as safety goggles
To make a successful claim for self-employed loss of earnings, you must provide evidence of your average weekly payments before the injury or illness, such as business records, invoices, and tax returns. You should also keep records of your working diary and any contracts you could not fulfil due to the injury.
Can I claim compensation for future loss of income?
While some injuries and illnesses may heal fully and relatively quickly, others may cause you to be off work for a considerable period, resulting in a substantial loss of earnings. If you have not returned to work by the time your claim concludes, your solicitor will work hard to predict what your future losses are likely to be.
Your medical records will serve as a starting point, as they should give you a prognosis for recovery and the date you will likely be able to return to work. If you suffered a permanent disability that does not allow you to continue working, the date you would have likely retired would be considered to calculate your future losses.
Once the period of absence is established, the total potential loss of earnings can be calculated based on your salary as if the accident had never occurred. The amount you could receive will also depend on your current age, possible promotions, job prospects, lost pensions and other benefits.
The standard approach involves establishing your net annual loss (the Multiplicand) and multiplying it by the remaining years until retirement (the Multiplier). That will provide a compensation award covering the loss of earnings over your remaining working life.
Can I claim for loss of earnings if a loved one was the victim of a fatal accident?
If you lost a loved one in an accident that was someone else’s fault, you could make a dependency claim under the Fatal Accidents Act 1976. In such cases, the dependents of the deceased can claim for the loss of financial support that they would have received if their loved one was alive.
To make a dependency claim, you must be able to prove that you were financially dependent on the person who died. This can include spouses, children, and other family members who were counting on the deceased for economic support. You also need evidence of your financial dependence, such as bank statements, bills, and tax returns.
The compensation that can be awarded in a dependency claim will depend on the circumstances of the case, including the age and earning capacity of the person who passed away and the dependents’ financial needs.
Dependency claims are often complex and involve obtaining and reviewing information about the deceased’s salaries, bonuses, investments, and any other alternative income and savings. In some cases, a lump sum payment may be awarded, while in others, intermittent payments may be made over a set period.
Is there a time limit to claim for loss of income due to an injury?
In the UK, the Limitation Act 1980 imposes a three-year time limit to start a claim for personal injury and loss of earnings, starting from either:
- The date you suffered an accident that caused your losses; or
- When a GP or another medical professional diagnosed your condition, known as the date of knowledge
If you have suffered an injury due to someone else’s negligence, you should always seek legal advice as soon as possible. If the other side admits liability from the start, your solicitor may be able to secure interim payments to cover your loss of earnings while the claim is still processed. Furthermore, this will make it easier to secure evidence to support your claim and increase your overall chances of success.
There are several exceptions to the three-year time limit, which include:
- If the injured person is a child, the three-year limitation period does not start until they turn 18.
- If the claimant lacks the mental capacity to conduct legal proceedings, a litigation friend could claim on their behalf at any time, as the time limit is suspended.
- The time limit to claim compensation if you suffered an accident abroad can vary from country to country and may be much shorter than three years.
- If you suffered a loss of earnings due to a violent crime, you typically need to claim compensation through the CICA within two years of the incident.
If you fill in our online claim form, a personal injury solicitor can let you know precisely what time limit applies to your case and help you get started with your claim.
Can I make a claim on a No Win No Fee basis?
Yes, if you are eligible to start a claim for loss of earnings, your solicitor will offer you a No Win No Fee service, which means that:
- You do not have to pay your solicitor upfront for legal representation;
- They will handle the claim on your behalf while you can focus on your recovery;
- You will receive free support and advice at every step of the claims process;
- Your solicitor will know exactly how much you are entitled to receive for your loss of earnings and will work hard to ensure your claim is successful;
- The No Win No Fee agreement means they assume the risk of litigation, so you do not have to pay them a single penny if you do not receive compensation for your losses;
- If your case fails, you will also be protected against legal expenses by the After the Event (ATE) insurance policy your solicitor will take on your behalf.
If you make a successful No Win No Fee claim, you will keep all the compensation awarded to you minus a few deductions:
- The cost of the ATE insurance policy, which you do not have to cover if the case fails
- Some basic legal fees that cannot always be recovered from the defendant
- A success fee of up to 25% of your settlement for general damages and past financial losses. Future loss of earnings is calculated separately and is not affected by the success fee.
To find out more about how to claim loss of earnings on a No Win No Fee basis, call 0800 678 1410 today for a free consultation with a legal adviser. Alternatively, you can request a call back using our online claim form.