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Loss of Earnings Capacity Damages

In Boucher v Wal-Mart Canada Corp. (Ont CA, 2014), the court suggests that, on the right facts, a claim for loss of earning capacity is conceivable in a wrongful dismissal context:
[102] .... In Canada, as the trial judge said in her ruling, an award for future loss of income compensates a plaintiff for loss of earning capacity – in other words, the loss of an asset, the capacity to earn: see M.B. v. British Columbia, 2003 SCC 53 (CanLII), [2003] 2 S.C.R. 477; Lazare v. Harvey, 2008 ONCA 171 (CanLII). Typically, in personal injury actions, plaintiffs have justifiable future loss of income claims because the accident has impaired their capacity to earn income.

[103] A claim for future loss of income can arise in an employment context where a plaintiff has not recovered from the effects of the wrongdoer’s action and the plaintiff has thus suffered a loss of any earning capacity because of the wrongdoer’s tortious conduct: see, for example, Piresferreira.
. MacLeod v. Marshall

In MacLeod v. Marshall (Ont CA, 2019) the Court of Appeal dealt with claims for loss of income in an extended sexual abuse case:
The Standard of Proof to Establish Entitlement to Damages for Pecuniary Loss

[13] Normally, a plaintiff has the burden of proving that s/he suffered damage as a result of the defendant’s wrongful conduct, and if so, the quantum of that damage. This is true in respect of each head of damages: Andrews v. Grand & Toy Alberta Ltd., 1978 CanLII 1 (SCC), [1978] 2 S.C.R. 229, at pp. 235-236.

[14] The objective of awarding damages for past and future loss of income is to put MacLeod in the same financial position he would have been in, had he not been sexually abused. Past loss of income is income loss between the date of the defendant’s wrong and trial, while future loss of income is loss of income after the trial: Watkins v. Olafson, 1989 CanLII 36 (SCC), [1989] 2 S.C.R. 750, at pp. 771-774.

[15] Typically, in the case of an adult plaintiff who was working at the time of the accident, there is a clear benchmark from which to determine whether there was a loss of income and to quantify past loss of income: for example, where a plaintiff was working and earning a given income before an accident and is no longer able to work after the accident, past income can be used to determine what the future income would be. As such, it should be determined on a balance of probabilities.

[16] However, in Mallett v. McMonagle, [1970] A.C. 166, at p. 176, cited with approval in Janiak v. Ippolito, 1985 CanLII 62 (SCC), [1985] 1 S.C.R. 146, at p. 170, Lord Diplock held that:
The role of the court in making an assessment of damages which depends upon its view as to what will be and what would have been is to be contrasted with its ordinary function in civil actions of determining what was. In determining what did happen in the past a court decides on the balance of probabilities. Anything that is more probable than not it treats as certain. But in assessing damages which depend upon its view as to what will happen in the future or would have happened in the future if something had not happened in the past, the court must make an estimate as to what are the chances that a particular thing will or would have happened and reflect those chances, whether they are more or less than even, in the amount of damages which it awards.
[17] In the case of a claim for economic loss following childhood sexual abuse, both past and future loss of income claims involve a consideration of hypothetical events because the child had not earned income prior to the assault. The jury must therefore determine not what did happen in the past but the chance that something would have happened, had the sexual abuse not happened in the past.

[18] This requires a determination of loss of earning capacity, not the loss of actual earnings. Since the plaintiff is not required to prove hypothetical events on a balance of probabilities, the burden of proof for entitlement is that of real and substantial possibility: Athey, at para. 27; Janiak, at p. 170. This is because we must now consider what kind of career the victim would have had, had he not been sexually abused: Andrews, at p. 251.


Quantification of Damages

[23] Where a plaintiff establishes that there is a real and substantial possibility the sexual abuse caused economic loss, damages are assessed by conducting the following analysis:

1. What economic opportunities the plaintiff might have had, had the sexual abuse not taken place;

2. What further income the plaintiff could have earned, if any; and

3. The chance that the plaintiff would have earned that additional amount, after taking into account the various contingencies.

[24] In quantifying the financial loss, the trier of fact must assess the chance that what the plaintiff says would have happened, would indeed have happened. In such cases, the plaintiff is entitled to compensation, but commensurate with the percentage chance that the plaintiff would have earned that income but for the defendant’s actions. Damages are commensurate with the value of the chance of earning that income: Janiak, at p. 170; Mallet, at p. 176.


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