(Supreme Court of Canada) A catastrophically injured plaintiff claimed for loss of earnings both during the period she would live and during the period in which, as result of the injury complained of, she would not live.
Held: It was well ‘established that a deduction for personal living expenses must be made from the award for lost earning capacity for the years she will actually live’ and ‘A number of considerations suggest that a deduction for personal living expenses should be made from the award for lost earning capacity during the ‘lost years’. The first is the fact that the projected earnings could not have been earned except on the supposition that the plaintiff would have been alive to earn them. There can be no capacity to earn without a life. The maintenance of that life requires expenditure for personal living expenses. Hence the earnings which the award represents are conditional on personal living expenses having been incurred. It follows that such expenses may appropriately be deducted from the award. Against this, it is argued that if Jessica had been born a millionaire, her personal living expenses during the ‘lost years’ would have been met from other sources. But this does not negate the fact that in order to earn income one must live and incur the attendant expenses.
It can be argued that not to make a deduction for personal living expenses is to introduce into the award for lost earning capacity for the ‘lost years’ a measure of overcompensation akin to the duplication which the law avoids in the case of an award for lost earnings during the plaintiff’s actual lifespan. This deduction has been justified for the years before the plaintiff’s actual projected death, on the ground that it avoids duplication between the award for cost of care and the award for lost earning capacity. But in fact, the ‘lived years’ and the ‘lost years’ cannot be so easily distinguished. The same reasoning applies to both: had the plaintiff been in a position to earn the monies represented by the award for lost earning capacity, she would have had to spend a portion of them for living expenses. Not to recognize this is to introduce an element of duplication and to put the plaintiff in a better position than she would have been in had she actually earned the monies in question.’
Citations:
[1994] 1 SCR 114
Links:
Jurisdiction:
Canada
Cited by:
Cited – O’Brien and others v Independent Assessor HL 14-Mar-2007
The claimants had been wrongly imprisoned for a murder they did not commit. The assessor had deducted from their compensation a sum to represent the living costs they would have incurred if living freely. They also appealed differences from a . .
Lists of cited by and citing cases may be incomplete.
Damages
Updated: 04 July 2022; Ref: scu.250030