Should Income Disparity Be Reflected In Injury Settlements?

 Posted on May 26, 2017 in Uncategorized

The most devastating personal injury claims involve wrongful death or injuries so severe the victim can no longer work. In these cases, it is necessary to use economic statistics to determine the total amount of lost earning capacity. If the victim is only beginning a career or is a minor who has not yet completed his or her studies, determining lifetime earning potential becomes much more difficult.

When creating a lost earning capacity damage model, economists often times refer to broader statistics that break down earning potential by gender, race and pre-existing health issues (smoking, diabetes, etc.) to determine how much a victim would have earned during his or her lifetime. It is one of the only instances in the legal system in which race and gender are regularly considered in determining a damage award.

Women and Minorities Receive Less

Projections take into account average lifetime earnings. Because statistics show white males earn more on average than minorities and women in similar positions, a white male or his family often receives a larger award than a person of color or a woman in a similar wrongful death or catastrophic injury case.

In fact, a report by the Washington Post found that in personal injury cases, when estimated future lost income was awarded to victims or families of victims under 25, white women who were more educated than white males in similar cases received less compensation ($1.39 million for white women versus $1.56 million for white men).

Is this defensible? Some say there is no way around it. "If there's a difference in society, it is what it is. It's a difference, and the economist's job is to figure out what would have happened," James Woods, a forensic economist in Houston, told the Washington Post.

Others claim the practice reinforces a societal discrimination that should not exist in the first place - a pay gap that many have worked over several decades to close and ultimately erase completely.

Put Experienced Legal Counsel In Your Corner

The important lesson, regardless of your color, ethnicity, or gender, is to put experienced legal counsel on your side. You need attorneys that understand lost earning capacity claims and have significant experience working with top-level economists to create the largest possible economic damage model for you and your family.