Loss of Income and Loss of Ability to Work

If you are injured in a motor vehicle accident in Ontario as the result of someone else’s negligence, you are entitled to a number of damages. Some of these damages may include general damages, damages for loss of income or loss of ability to work, and even present and future costs of care.

In Herrington v. Brewer et al, 2022 ONSC 2852, the defendant accepted liability for the collision and the plaintiff sought damages for all of the above. The plaintiff argued that he suffered a loss of competitive advantage as a result of the injuries caused by the accident and therefore lost business revenues and earning capacity.

Justice Smith of the Ontario Court of Justice preceded over the case and ruled that the plaintiff did indeed suffer an income loss as a result of his accident in 2015. Below, we explore this case in more detail.

The Case

In December 2015, the defendant, Paul Herrington, was rear-ended while stopped at a red light. Herrington’s vehicle was impacted by the car behind him after it had been hit from behind by a van operated by one of the defendants. As a result of the accident, Herrington suffered elbow tendon injuries in his left arm.

Prior to the motor vehicle accident, Herrington enjoyed an active lifestyle which involved handyman work, golfing, boating, fishing, and socializing with friends and family. He also worked as an auto repair mechanic.

Though Herrington attended over 150 medical appointments with various healthcare professionals, including chiropractors and massage therapists, he was unable to continue in his profession as a mechanic, nor could he enjoy the same leisure activities he had prior to the accident.

In order to keep his business profitable, Herrington decided to hire apprentices to do the manual work of auto repair, while he switched to a management role. These apprentices had little to no work experience and Herrington trained and mentored them to fix the cars that came into his shop.

The Issue

Herrington’s apprentices were able to repair many cars and keep the business open and profitable. However, Herrington did lose a number of clients, some of which had long-term contracts and who preferred more experienced mechanics.

Herrington argued that he would not have lost these clients had he been able to continue the work himself and had lost money as a result. He argued that his injury caused a loss of ability to work and, therefore, a loss of opportunity and a loss of competitive advantage.

The defendants, on the other hand, submitted that Herrington had mitigated his financial losses. Indeed, they used his tax returns to prove that he was making as much, or more, income than he was prior to the accident. They also argued that the costs of future care should be limited to the costs of treatment alone.

The Result

Herrington’s legal representation argued that, because Herrington was unable to do the manual aspect of his job, he had lost both his competitive advantage as well as future opportunities. Had he lost his business, he could not be hired as a car mechanic elsewhere and would be out of work. In addition, had his apprentices decided to take up work at another employer, he would be unable to maintain his business.

Regardless of the fact that Herrington continued to work and make money, his economic loss should be calculated based on the value of the opportunity lost as a result of his injuries. His lawyer claimed that Herrington was only able to fulfill 30% of his duties as a car mechanic and should be compensated for the other 70% of a car mechanic’s salary. Justice Smith agreed that Herrington should be compensated for the loss of business revenue and loss of competitive advantage.

In regard to general damages, Justice Smith noted that Herrington’s pre-accident personality had been described as that of an “Energizer Bunny.” Post-accident, his family members described that he was depressed and sad, had gained weight, and that he spent much of his time watching television instead of engaging in the leisure activities he previously enjoyed. In light of this and other factors, Justice Smith awarded general damages for pain and suffering in the amount of $75,000.

Justice Smith described the loss of competitive advantage as an award “based on the unavoidable fact that because of the injuries suffered by the plaintiff his own capacity to earn money in his chosen trade has been taken away” and recognized that Herrington could not compete in the marketplace as an auto repair mechanic. This resulted in a loss of earning capacity because Herrington’s ability to earn money had been taken away. For pecuniary damages for loss of competitive advantage/loss of earning capacity, Justice Smith awarded Herrington $571,595.

Furthermore, Herrington received an award for all the damages he had claimed in his case, including damages for loss of business revenue ($212,970), past and future costs of care ($9,903), damages for loss of housekeeping and handyman abilities ($25,000), as well as pre and post judgement interest.

Lost Income as the Result of an Accident?

When you or someone you love is injured in an accident and incapable of working, financial security is at risk. When that accident is the result of someone else’s negligence, the general damages and losses suffered are not the responsibility of the injured party. Indeed, damages for loss of income and ability to work are only some of the damages the victim may be entitled to.

We understand the difficulty in navigating the Insurance Act and figuring out what you may be entitled to. If you’ve lost income due to an accident that was someone else’s fault, contact Sharma Law and let us help you get the financial compensation you are owed.

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