BC Court of Appeal reduces loss-of-earning-capacity award to plaintiff with uncertain plans

Impossible to discern basis of judge's assessment of damages at $255,000

BC Court of Appeal reduces loss-of-earning-capacity award to plaintiff with uncertain plans

The BC Court of Appeal has reduced an award for loss of future earning capacity in a personal injury case due to significant uncertainty about the plaintiff’s plans and future recovery.

In Ploskon-Ciesla v. Brophy, 2022 BCCA 217, Marianne Brophy challenged the awards for loss of future earning capacity, loss of housekeeping capacity and cost of future care to Anna Maria Ploskon-Ciesla. In 2017, the parties were involved in a motor vehicle accident, resulting in Ploskon-Ciesla suffering from soft tissue injuries to her neck, right shoulder, lower back, and right buttock. The judge awarded $255,000 to Ploskon-Ciesla as compensation for loss of future earning capacity.

Ploskon-Ciesla was born in Poland, but she eventually moved to Canada with her husband. She held a master’s degree in counselling and a diploma in massage therapy. Shortly before the accident, she worked as an unregistered massage therapist, earning about $30 to $35 per hour, including tips. In the years before the accident, she had not taken steps to become a registered massage therapist in British Columbia, and despite her Polish counselling qualifications, she had rejected counselling as a career option. The court noted that she gave little evidence about her plans before or after the accident.

Borphy argued that the judge committed an error in determining the award for loss of future earning capacity because Ploskon-Ciesla failed to prove there was a real and substantial possibility that she would have earned more in the future without the accident, than she would likely earn given the accident.

Assessment of loss of future earning capacity

To assess an individual’s loss of future earning capacity, the court referred to the approach in Rab v. Prescott, 2021 BCCA 345 which involved a three-step analysis. The first step is determining whether the evidence discloses a potential future event that could lead to a loss of capacity. The second step is analyzing whether, on the evidence, there is a real and substantial possibility that the future event in question will cause a pecuniary loss. Finally, the third step calls for the assessment of the value of that possible future loss, which must include assessing the relative likelihood of the possibility occurring.

In this case, the court found that the judge failed to apply the three-step test to the evidence, and he did not make the necessary findings of fact to support the award. While the judge implicitly found that a loss of earning capacity had occurred, he did not engage in any analysis of whether there was a real and substantial possibility that Ploskon-Ciesla’s injuries would cause a loss of future earning capacity in relation to her plans and intentions. Specifically, the judge failed to examine what opportunities were realistically open to Ploskon-Ciesla given the accident.

The court emphasized that it was a central task to compare the likely future of Ploskin-Ciesla’s working life if the accident had not occurred with her likely future working life after the accident. In addition, the court also found that the judge did not analyze the likelihood that Ploskon-Ciesla would return to full-time work or what work that might be.

“It is impossible to discern the basis of the judge’s assessment of damages at $255,000,” the court said. “Although the judge did make findings on a number of relevant matters, he did not apply those findings in a reasoned analysis to explain and justify the award. Rather, he appears to have plucked a number from the air, leaving this Court and the parties to speculate on the basis for the award.”

Revised analysis of future income

The court found that there was very little evidence that would help it to assess the likelihood of various events in order to determine the value of the loss of future earning capacity. Further, Ploskon-Ciesla provided very little useful evidence about any alternative career paths that would assist in grounding a quantification analysis.

Nonetheless, the court agreed with the judge’s assessment that an income loss of $10,000 a year was a reasonable maximum measure of lost residual capacity. However, the court deemed it proper to adjust this maximum amount to reflect the uncertainties with Ploskon-Ciesla’s plans. The court reduced the maximum annual loss by 50 percent due to the significant uncertainty about the plaintiff’s plans and future recovery. In addition, the court also applied a 20-percent discount to reflect negative conventional contingencies such as the risks of future unemployment, illness, and so on which typically require no formal proof. The court concluded that an award of $75,000 for loss of future earning capacity was fair and reasonable in the circumstances. In addition, the court also reduced the award of cost of future care from $17,199 to $4,108. Finally, the award of $42,000 as compensation for future loss of housekeeping capacity was likewise reduced to $15,000.

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