RETHINKING PERSONAL INJURY DAMAGES: COMPENSATION FOR LOST CAPACITIES

Authors

  • DENISE REAUME

Abstract

This article reexamines the debate about whether personal injury damages are awarded for loss of earnings or loss of earning capacity. It begins by analyzing the leading cases to see if a coherent approach emerges. Discovering none, it then turns to cases in three problematic areas-compensation to homemakers, for lost illegal income, and for lost business income. These areas reveal the unsatisfactory nature of both the loss of earnings and loss of earning capacity approaches. The author suggests a new conceptualization of the issue. It should be recognized that a tort victim frequently suffers the loss of a wide variety of capacities. Some of these have a market value, that is, people do commonly exchange their use for payment. These should be compensated as pecuniary losses. However, the loss of a capacity should be compensated, as a pecuniary loss, only to the extent that the plaintiff would have used it to perform economic activity. This approach is then applied to the three problematic types of case to achieve a more satisfactory solution.

Keywords:

Tort Law

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Published

1988-03-01

Issue

Section

Legal Commentary

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