Calculating a self-employed claimant’s loss of earnings is difficult, time-consuming and fraught with complications. Difficult yes, but not impossible to calculate. Addressing it should be done sooner rather than later. Professional help from an Accountant may be required. The main problem facing a Claimant is a lack of evidence.
As in all personal injury claims damages for loss of earnings are awarded on the basis of evidence. You (‘the Claimant’) will need to prove your loss. That loss could be continuing if the injury is severe. It is not enough for you to provide a ‘ballpark figure’ without evidence and expect to be awarded that figure. Such evidence could include:
- Tax returns
- Accounts (profit and loss)
- Invoices and receipts
It is the net loss of income to a claimant that is the determining factor and not the turnover of the business.
A claimant will need to show:
- That the profitability of the business stagnated or decreased
- That this was due to the claimant not being able to work due to their injury or only work in a reduced capacity rather than due to outside factors e.g. market conditions.
The normal rules of mitigation apply. If you can employ someone to cover you or you can run your business from home then you would be expected to do so.
Incomplete Accounts could result in no award (Ashcroft –v- Curtin .
A claimant who is part of a Partnership can only recover their loss limited to their share of the Partnership profits.
The courts do recognise that losses incurred by a limited company can be recovered if the injured claimant in effect runs the company as a ‘one man band’.
A claimant is able to recover additional income losses even if they have not paid tax etc on those earnings, a Court is likely to frown and a Defendant is likely to notify the tax office!
Loss of chance e,g, a business venture can be claimed; but by its very nature can only be speculative. The ‘chance’ cannot be too remote and it must be proven.
The key issue remains.
NO EVIDENCE NO AWARD