Can I claim for lost earnings?

If you suffered a loss of earnings due to an injury that wasn’t your fault, you should be eligible to recover them as part of your compensation award.

If another party, such as your employer or a road user, was at fault for your accident, you can start a personal injury claim and include any lost income in the damages you seek. This refers to lost wages during recovery, as well as loss of future earnings if you suffer a long-term or permanent disability.

This guide will explain what can be included in a claim for loss of earnings, how your compensation award will be calculated, and what you need to start your claim.

The solicitors we work with can offer you a free case assessment and answer all your questions about the claims process. If you are eligible to claim and decide to go ahead, they will take on your case on a no win no fee basis, so there is no financial risk to you.

To get started, please call us on 0800 470 0474 or enter your details into our online contact form to request a call back.

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Table of Contents

• What is loss of earnings?
• Can I claim compensation for loss of earnings?
• How to claim loss of earnings
• What evidence do I need to be able to claim lost income?
• Can I claim for loss of earnings if I am self-employed?
• What can be included in a claim for loss of earnings?
• Can I claim for future loss of earnings?
• How is loss of earnings calculated in personal injury claims?
• Can I claim lost earnings for a loved one who passed away?
• Can I claim lost earnings for taking off work to care for a loved one?
• What is the time limit for starting a loss of earnings claim?
• Can I make a personal injury claim on a No Win No Fee basis?

What is loss of earnings?

Loss of earnings in a personal injury claim refers to the financial compensation you can seek for the income lost from being unable to work due to your injuries. These can be included in your claim as part of a broader category known as special damages.

Special damages cover all financial losses and expenses related to an accident and injury, both past and future. Together with general damages awarded for pain, suffering and loss of amenities, they make up the final compensation award you could be entitled to.

Loss of earnings may be classified into the following:

• Short-term losses for injuries that cause you to miss a few days or weeks of work
• Long-term losses for injuries that cause you to miss months or years of work
• Loss of earning capacity if you suffered injuries that permanently affect your earnings
• Loss of bonuses or overtime for missing opportunities to earn additional income during recovery

Can I claim compensation for loss of earnings?

The easiest way to determine if you may be able to claim loss of income and other damages is through a free consultation with a personal injury solicitor. They will help you make a successful claim if they can ascertain the following:

• Another party, such as your employer, a driver or a business owner, owed you a legal duty of care. Your solicitor will prove this by referring to legislation such as the Health and Safety at Work Act 1974 and the Road Traffic Act 1988.
• They breached their duties towards you and caused an accident.
• You suffered an illness or injury and loss of earnings due to the accident.

If these can be proven, your solicitor will help you make a claim for lost earnings and other damages on a no win no fee basis. They will also help you gather the necessary evidence to support your claim and handle all communications with the defendant on your behalf.

How to claim loss of earnings

If you were unable to work due to an injury or illness, you may wonder how to claim loss of earnings during this period. The steps of a personal injury claim are essentially the same, regardless of your circumstances:

1. The first thing you should do is talk to a legal adviser to discuss the merits of your claim. You can request a free consultation today by calling us on 0800 470 0474.
2. If you are eligible to claim compensation, you will be paired with a personal injury lawyer with expertise in your type of case.
3. Your lawyer will help you gather the necessary evidence to prove negligence and the claim for loss of earnings. The types of evidence you may need are detailed in the section below.
4. Once you have all the necessary documents, your solicitor will send a claim notification form to the defendant. The defendant will usually have up to four months to respond to your letter and admit or deny liability.
5. If the defendant admits liability, your solicitor will begin negotiating your loss of earnings compensation award.
6. If the other party denies liability, your lawyer will be prepared to issue court proceedings and take your case before a judge if necessary. This is rarely the case, as almost all claims are settled through negotiations.
7. If your claim is successful, you should receive the compensation owed within four weeks.

What evidence do I need to be able to claim lost income?

As mentioned, any loss of earnings incurred due to an accident will be included in a personal injury claim as part of the special damages. You will need various types of evidence to prove your losses and someone else’s liability for them, which may include:

• Photographs of the accident scene and any hazards that have contributed to it
• CCTV or other video footage of the accident, if available
• Pictures of your injuries and your recovery process
• Medical records and diagnostic tests that show the type and severity of the harm you suffered
• Details of the treatments you received and your recovery prospects
• Accident report forms filed with the responsible party
• Statements from witnesses who have seen how the accident occurred or its impact on your life
• Your own testimony regarding the accident and how it has affected you
• Evidence of related financial expenses, such as receipts and invoices

To prove your loss of earnings, you will need further proof, such as your employment records, payslips, bank statements, or tax returns. Your solicitor will help you gather everything you need to secure the maximum amount of compensation to cover your loss or earnings and other losses.

Can I claim for loss of earnings if I am self-employed?

If you are self-employed and have missed work due to an injury caused by someone else’s negligence, you are entitled to make a loss of earnings claim. However, the process can be a bit more complex than that of an employee who can produce copies of payslips. That is because self-employed individuals may have an erratic employment history with variable hours and incomes.

In these circumstances, your loss of earnings will be calculated based on evidence such as:

• Your business records and accounts
• Tax returns for the past three years or as close as possible to three years
• Invoices or contracts you were unable to complete due to the injury
• Bank statements
• A statement from your accountant
• Records of your working diary
• Copies of your SA302 calculation from HMRC

Based on these, your solicitor will be able to calculate your losses during recovery and estimate any future loss of earnings if you need more time to return to work.

What can be included in a claim for loss of earnings?

A claim for lost earnings can include various components to fully compensate for the financial impact of an injury or illness that prevents you from working, such as:

• The net earnings lost during the period you were unable to work.
• Lost overtime during recovery.
• Lost bonuses or commissions you missed out on due to your inability to work.
• Loss of benefits such as pension contributions or health insurance.
• Lost business opportunities if you are self-employed.
• Loss of profits if your business income was significantly reduced.
• Loss of promotions if you have lost the chance to advance in your career.
• Loss of holidays and sick days if you had to take these as part of your absence from work.
• Any other work-related benefits that you have missed out on during recovery.

As you can see in the section below, you can also claim for future loss of earnings if your injuries have a long-term effect on your ability to work.

Can I claim for future loss of earnings?

If you suffered a severe injury or illness that has a long-term impact on your ability to work, you can also claim compensation for future loss of income. This could include:

• Ongoing financial losses if you are unable to return to your previous job
• Reduced work hours and earning capacity due to disability
• The potential loss of promotions, bonuses and career advancement
• The need to take a lower-paying job due to your condition
• Early retirement due to your injury
• The need for a career change or retraining

If you suffered a severe accident, your claim could be significant, especially if you are far from retirement age. Your solicitor will begin calculating your compensation based on your prognosis for recovery and the likely date you should be able to return to work. If you have suffered a severe disability and cannot return to work, they will work out when you would have been likely to retire.

Once the period of absence from work is determined, your solicitor will assess your total loss of future earnings. This is more complex than just adding up what you would be expected to earn until retirement.

Instead, they will use the Ogden tables for an accurate assessment. These tables help calculate the multiplier (a figure representing the number of years the loss is expected to continue) and the multiplicand (the annual amount of the financial loss) based on factors such as age, gender and life expectancy.

How is loss of earnings calculated in personal injury claims?

Your compensation award for lost earnings will be determined based on your net pay. This refers to the money you take home after taxes. The net pay will be calculated pro-rata as follows:

Net annual salary + Bonuses + Commissions + Probable overtime + Future loss of earnings + Any other work-related financial losses

If you receive statutory sick pay (SSP) or state benefits such as Universal Credit during your time off work, these will likely be deducted from your compensation award. If your absence from work is short, your solicitor will typically work out how much you earn per day and multiply it by the number of missed workdays.

Can I claim lost earnings for a loved one who passed away?

If a loved one passed away due to someone else’s negligence, you could claim all the financial losses they incurred between their accident and their death, including the loss of their usual earnings during this period. In such cases, a claim can be brought under the Law Reform (Miscellaneous Provisions) Act 1934 by a dependant of the deceased.

Furthermore, anyone classified as their dependant can also make a financial dependency claim if they have relied on the income provided by them. Under the Fatal Accidents Act 1976, your claim could include:

• Lost salaries
• Loss of pensions
• Loss of healthcare benefits
• Loss of bonuses and overtime
• Loss of share schemes and investments
• Any other alternative income that your loved one had

Can I claim lost earnings for taking off work to care for a loved one?

Yes. You may be entitled to claim compensation for lost earnings as part of a loved one’s personal injury claim if you took time off work to care for them. This might be the case if your child was injured due to someone else’s negligence or if an adult suffered injuries so severe that they needed assistance with daily activities.

To be compensated for loss of earnings in a situation like this, you must be able to prove that the time you took off work was for the sole purpose of taking care of your loved one.

Furthermore, the amount of time you took off must be reasonable. This means you exercised a level of care that a competent person would have used in the same or similar circumstances.

It is also important to note that you cannot include any time off from work during a holiday in your claim.

What is the time limit for starting a loss of earnings claim?

Under the Limitation Act 1957, the usual time limit to start a compensation claim is three years following an accident or injury. After the claim limitation date expires, your case will be time-barred and no longer valid, so it is essential to start legal proceedings as soon as possible.

A few exceptions apply to this rule:

• With child injury claims, the three years begin to run on the child’s 18th birthday, from which they have until 21 to start a claim if nobody represented them beforehand.
• The time limit is suspended if the injured party cannot make a loss of earnings claim due to lacking mental capacity. A litigation friend could represent them at any time.
• There is a two-year time limit to claim through the CICA following an assault or another violent crime.
• You have three years to seek compensation if you lost a loved one due to someone else’s negligence, starting from when they passed away.

Can I make a personal injury claim on a No Win No Fee basis?

If you have a valid loss of earnings claim, you will benefit from a no win no fee service from your solicitor. That means there are no upfront legal fees to pay, and you do not risk losing a single penny if your case is unsuccessful.

Your solicitor will only get a success fee if you receive personal injury compensation for your loss of earnings and other damages you suffered. This fee is capped at 25% of your past financial losses and general damages and does not apply to future loss of earnings.

Furthermore, if your case fails, you have additional protection against legal expenses and disbursements. This is offered by the After the Event (ATE) insurance included in your arrangement, which will cover all the litigation costs if you lose the claim, including the defendant’s, so you will never be left out of pocket.

If you were unable to work following an accident and are wondering if you can claim compensation for loss of earnings, call 0800 470 0474 for a free case assessment or enter your details here to request a call back.