Estimating wage losses in personal injury cases: what are contingencies?

When estimating both past and future wage loss, the courts must take into account all positive and negative contingencies. In this context, a positive contingency is a likely event that will have a positive effect on earnings. A negative contingency is a likely event that will have a negative effect on earnings. For example, a layoff might be a negative contingency and a promotion might be a positive contingency. In order to determine which contingencies are likely, the courts will look at factors such as the specific circumstances of the individual, the nature of the industry they work in, and contingencies common to the general population as a whole.

In a recent Supreme Court of British Columbia case, the courts found that both the positive and negative contingencies were likely to “balance out” and made no deductions to future wage losses for contingencies:

“[86]         With respect to contingencies, I am of the view that no deduction should be made. Given the importance the plaintiff placed on her employment, I do not think that there is a real possibility that she would have left work before 65 or voluntarily reduced her working hours. On the contrary, she may have worked beyond that age on a full- or part-time basis. While the plaintiff may have required time off for illness in the future even without the accident, it is also possible that she would be promoted to a higher-paying position. Finally, a lay-off is possible but unlikely; her employer is accommodating and evidently thinks highly of the plaintiff as an employee. Overall, I conclude that the positive and negative contingencies balance out.”

This recent ruling recognized that workers now tend to work beyond aged 65 and gave the plaintiff credit for a history of devotion to her employment. Despite general negative contingencies that are likely to affect the working population as a whole – early retirement, illness, and layoffs – the plaintiff, in this case, did not have any amounts deducted from her award to reflect contingencies. This case involved a relatively small whiplash style accident. The plaintiff’s injuries, however, manifested into much larger psychological problems. This case illustrates the benefits of effective and competent counsel.

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