Calculating Loss of Future Earning Capacity In a Personal Injury Claim¿
When an individual suffers severe injuries that have the potential to affect that person’s future employment ability, that individual has the right to sue the actor responsible for damages with respect to their loss of future earnings.
What happens when the injured party is an athlete, or a CEO whose future income can be calculated to stretch into the millions? On January 15, 2020, Atlanta Hawks forward, Chandler Parsons, was severely injured after he was struck by a negligent, drunk driver. There is evidence to suggest that the injuries sustained might be career-ending. As a result, under Florida law, Parsons would have the ability to file suit against the drunk driver—for pain and suffering damages and economic damages, including but not limited to for loss of future earning capacity
Parson’s case is a unique one though. After he signed a contract in 2016 for $94.8 million, his career has been marred with serious knee injuries and he has only appeared in 100 games since. This last offseason, Memphis traded Parsons to the Atlanta Hawks for a minimal return in order to get his salary off the books where he has struggled to receive playing time on an inexperienced Atlanta roster.
Parson was set to become a free agent this upcoming offseason and would have been eligible to sign another contract this summer. If it is determined that Parsons sustained career-ending injuries, it would be extremely difficult to determine what his future earnings on his next contract, if he were to even receive one, would be worth. Parsons is a 31-year-old who has battled injuries his last four years and has struggled to play meaningful minutes. It is more likely than not that he was not an option for many teams this next season. Yet, there is a possibility that Parsons would have potentially received a veterans’ minimum level contract—which still has the potential to exceed $2 million—or explore the possibility of playing overseas. In order for Parsons to recover a large sum for loss of future earnings, his lawyers will need to demonstrate sufficient evidence that either NBA teams or overseas teams were still prepared to take a chance on the oft-injured 31-year-old athlete.
Parsons case serves as a good illustration for highlighting the many factors that go into calculating the value of a claim for loss of earning capacity. Instead of using a professional athelete, what if we try to calculate the loss for a 30 year old school teacher. We could take the yearly salary through age 65, adjust for inflation and then discount that to its present value. This is an easier example because you don’t have the variable of whether the professional athlete will continue to play in the respective league.
The key point is that the same injuries may be worth vastly different sums, depending on the career of the injured party.