Loss of Competitive Advantage - another way to assess future income loss

April 13, 2008, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer

When trying to determine the extent of an injured person´s damages, one area that has to be considered is future income loss.  In some cases, future income loss can be calculated where the injured person suffers a complete inability to work.  This could be the result of severe brain injury or significant spinal cord injury.  However, for most injured persons, they have the ability to do some work after the accident.  The issue then is to try and determine what the injured person´s earning capacity was like before the accident and what has it become as a result of the injuries arising from the accident.  This exercise generally consists of a lot of "crystal ball gazing".  When attempting to predict an injured person´s future income earning capacity the courts have also applied a number of "contingencies" or potential factors that would have had an impact on the person´s ability to work regardless of the accident.  Some contingencies include future layoffs, change in career path, early retirement, pregnancy and parental leave.  With many factors to consider, the courts have considered other methods to assess future income loss.  One method is to estimate what the annual loss of income is for the injured person and provide a present value of that annual loss amount working back from the pre accident expected retirement date.  Another approach is to assess the injured person´s Loss of Competitive Advantage.

The concept of Loss of Competitive Advantage is recognition that because of the injuries suffered by the injured person, that person will no longer be able compete in the market place for work as he would have prior to the accident.  There are now positions or jobs that the person will not be able to compete for because the injuries have hindered the injured person´s ability to carry out the job functions.  Often this is due to injury related restrictions such as certain movements, like pushing, pulling or working overhead, or strength and weight limitations.  In these situations the courts have developed the concept of Loss of Competitive Advantage as a loss of an asset by the injured person.  The ability to freely compete in the marketplace for the type of work the injured person would have competed for before the accident is the asset that is now lost.

Generally, awards for loss of competitive advantage have been in the range of $50,000.00 to $100,000.00.  However, a recent Ontario Court decision (St.Prix-Alexander v. Home Depot of Canada Inc.) awarded $400,000.00 to a plaintiff who suffered major injury to her cervical spine as a result of an accident.  The plaintiff had been able to continue to work for a period of time, even up to 60 hours, but following cervical surgery she was unable to maintain the work schedule.  She could also not longer accept jobs that demanded a lot of concentration and were as stressful as Executive Assistant as she had prior to the accident.

About Deutschmann Law

Deutschmann Law serves South-Western Ontario with offices in Kitchener-Waterloo, Cambridge, Woodstock, Brantford, Stratford and Ayr. The law practice of Robert Deutschmann focuses almost exclusively in personal injury and disability insurance matters. For more information, please visit www.deutschmannlaw.com or call us at 1-519-742-7774.

The opinions expressed here, while intended to provide useful information, should not be interpreted as legal recommendations or advice.