Compensation for loss of earnings – 5 cases

Compensation for loss of earnings in practice?

The lost earnings may be the consequence of the reduced capacity to work or reduced that is ruined options of further professional development and improvement of the injured (the loss of raise, anticipated promotion or incapacity to do certain jobs). In that case, „if he/she suffers the damage due to injuries, the person with the reduced capacity to work or deprived of the option of further professional development and advancement is entitled to damages from a liable person.“ (The decision by the Supreme Court of Serbia, Revision No. 288/82)

Compensation for loss of earnings in accordance with; Article 195, Paragraph 2 of the Law of Obligatory Relations, the claimant, who due to total or partial incapacity to work loses his earnings or options of further professional development and advancement, shall be compensated by a liable person through annuity.

„Pursuant to Article 195 of the Law of Obligatory Relations, a liable person is obligated to compensate the claimant who, due to a bodily injury and health impairment, has his capacity to work partially or totally reduced and the claimant suffers damage in the form of the lost or decreased earnings.

This legal provision, in addition to the rule from the civil law, which was applicable at the time of an adverse event, should be interpreted as to take into account the basis for exercising the right to compensation for this specific type of material damage existent only if it has been established that the injured, due to suffered bodily injuries and health impairment cannot generate earnings as prior to his injury that is earnings he would have generated if healthy that is if there hadn’t been for the reduced capacity for work, but not with reference to the established level of his reduced capacity to work. The fact that costs of living are higher is of no relevance to the right to compensation on the previously mentioned basis“.

Compensation for loss of earnings due to incapacity to work

The earnings lost due to partial or total incapacity to work actually refer to the lost earnings incurred from the moment of the medical treatment termination and in the future, for as long as the period of incapacity lasts. Thus, it is not about the earnings lost during the treatment and rehabilitation; but the damage, which takes effect later if the treatment, does not manage to restore the injured party to the physical condition prior to the injury. The earnings lost in the afore mentioned way appear as the lost earnings from the moment of the medical treatment termination up to the moment of the court decision about damages and as the lost earnings at the moment of the court decision and in the future. There is an important difference, because pecuniary compensation payable in installments may be awarded only if the damage exists at the time of the court decision and onwards, but not historically, for the previously suffered damage.

This is how the judicial practice stands „Compensation payable in installments (annuity) may be awarded only for the damage existent at the moment of the court decision rather than for the previously suffered damage for which the court prescribes a one-time lump-sum“.

The earnings, which the injured would have generated if there had not been for an adverse event that resulted in the partial or total incapacity to work that is the known damage shall be considered the lost earnings from the moment of the termination of the medical treatment up to the moment of the court decision about damages. The amount of damages is calculated in the following way: „the claimant’s earnings at the time prior to the injury are compared with another employee’s earning at the same time and occupying the same post in order to determine if the claimant has achieved approximate results, which the earnings are dependent upon“. If the claimant achieved approximate results prior to his injury, it may be assumed that he would have achieved equal results in the future so that other employees’ fluctuations in earnings in the later period could be taken as a measure of the personal income, which the claimant could have generated.“

What can you claim compensation for?

Compensation for loss of earnings in case of extra job; In addition to the earnings from his primary profession, the injured is entitled to claim damages for the lost earnings from his extra job, providing he had one prior to the injury. „If a person, in addition to his primary profession, does an extra job, for which he receives salary, he is entitled to damages paid for the lost earnings, which he would have earned through his extra job. The amount of damages is determined according to the earnings which could have been expected if things had been normal.“

The right to damages paid for the reduced capacity to work may be granted to housewives too, who due to the suffered injury are not able to do their household chores. When determining damages in such cases the judicial practice has the following position: „As regards the reduced housewife’s capacity to work, on the basis of which she exercises the right to damages, expert evidence should establish if the housewife is still capable of performing her household chores even if with greater effort, but without health impairment. In that case, she would be entitled to damages on the account of her reduced capacity to work at the amount equal to costs required to hire extra assistance, regardless of the fact if that was another’s assistance she hired or it was to her health’s detriment that she chooses to do household chores by herself.“

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