When considering bringing a claim for personal injuries, one of the most pressing reasons is often to recover lost wages due to sick leave. Needing time off work to recover from an injury, or an operation, can be one of the most stressful aspects, as bills and everyday expenses continue to mount. It can also lead some to attempt to return to work too quickly, possibly hindering their own recovery.
You may need time off immediately following the accident, or later due to flare ups, following treatment or surgery, or during a period of post-operative recovery. Understandably, being unable to work and earn a living can be incredibly stressful, so recovering that lost money as soon as possible is key.
The most significant claims for lost earnings tend to arise out of serious accidents such as road traffic collisions involving motorbikes, cyclists and pedestrians, accidents at work (including construction and work at heights), farm accidents, or slips, trips and falls. Injuries could include fractures, severe burns, head or spinal injuries, internal organ damage, and injuries resulting in permanent disability or disfigurement. Claims can also be brought for less serious injuries resulting in time off work.
Will I receive statutory sick pay (SSP)?
In England, if eligible, statutory sick pay (SSP) should be paid by an employer if their employee has been injured and unable to work for four days (in a row) or more. The current level of SSP is £116.75 per week (payable after three initial "waiting days"). This can be paid for up to 28 weeks.
SSP is paid by your employer in the same way as your normal wages, for example weekly or monthly. If you have more than one job, you may get SSP from each employer. Tax and National Insurance will be deducted.
Some employees are contractually entitled to Company Sick Pay, which may help to bridge the gap between SSP and their usual wage for a defined period following the injury.
Am I entitled to benefits?
If you are unable to work due to your injuries, then you may be entitled to benefits, such as Universal Credit. You may also be entitled to other benefits, for example, if you need long-term help doing everyday tasks or getting around, you may be entitled to Personal Independent Payments (PIP). Claims can be made online on the government website.
It is important to note that benefits received as a direct result of an injury can be offset against your claim. For example, if you have received Universal Credit, this would be offset against a claim for loss of earnings. However, this can be complicated if your absence from work is only attributable to the accident for a limited period, and it is therefore important to seek legal advice.
How quickly can I recover my loss of earnings?
This will depend on the specific circumstances of each claim. The first hurdle in any personal injury claim will be establishing who is at fault for the accident. If fault is admitted by the defendant insurer at an early stage then this will make the claim much more straight forward, and it is possible to request what is called an ‘interim payment’ from the defendant. This would allow you to receive an early payment to assist you financially whilst your claim continues. This would be more difficult if liability was denied, as insurers are unlikely to make early payments if the claim is disputed. However, it is possible for insurers to make ‘without prejudice’ payments, which means that they can raise a payment whilst liability is being investigated and a decision made. Each claim will be dealt with on its own facts, and evidence will be needed to support any claim for loss, therefore it is best to discuss this with your solicitors and take legal advice.
Claiming loss of earnings for an employed person
As an employee, you may have lost your usual salary during your time off work, as well as other earnings such as bonus, overtime, or unsocial hours payments. In order to evidence your loss, you will need to provide copies of your wage slips from before and after the accident which show a reduction in your earnings. Your employer may also be contacted (with your authorisation) to verify the absence, the reason given, and the loss.
Calculation of lost income for an employed person will differ depending on the specific circumstances. For example, someone who receives a set salary, with the same net earnings each month, will have a straightforward claim compared to someone who works variable hours, with different levels of pay depending, for example, on overtime, or unsocial hours. An injured person may also work multiple jobs and each loss may need to be calculated differently. It is important to instruct a Solicitor who will fully consider your earnings and apply the relevant method of calculation, depending on your situation, to ensure you recover the correct level of compensation.
I received full pay whilst I was off, do I still have to claim?
Even if you have received full Company Sick Pay during your absence, there may still be a claim to be made, but on behalf of your employer; this is referred to as ‘employer’s recoupment’. Many employment contracts include a clause that allows employers to recover sick pay when a claim is being made against a third party. It is important that this is considered to make sure that you as an injured person are not in breach of your employment contract, which could leave you responsible for those sums.
Claiming loss of earnings if you are self-employed
As a self-employed person, your calculation for lost earnings will depend on whether you are a sole trader, a contractor, in a partnership, or a director of a limited company. You will be asked to provide copies of your HMRC self-assessment tax returns and profit and loss accounts (if applicable) to evidence your earnings. If you have an accountant, they will be able to assist you with this. You will also be asked for details of the time you have had off work, and the actual loss of you have suffered. It is particularly helpful if you can provide evidence of contracts, and lost or cancelled work, which you would have undertaken, but for your injuries.
It is important to note that you are only entitled to recover your actual loss, and not your gross income. You are also only entitled to the net sum after tax and national insurance.
Calculating loss of profit for a self-employed person can be more complicated and it is therefore important to instruct experienced solicitors who understand the different methods of calculation and how best to present your claim. If a claim is particularly complex or high value, it may be necessary to instruct an accountant to calculate your loss of earnings. Again, your solicitor should advise you if this will be necessary.
I haven’t yet been able to return to my job, can I still claim?
If you have not been able to return to work or have had to change jobs as a result of your injuries, then you could be entitled to a significant claim for loss of earnings. Ultimately, any head of loss must be supported by medical evidence. A medical expert will be instructed to prepare a report on your injuries, and they will provide their opinion on the symptoms you have suffered, the affect it has had on your work (as well as other areas of your life), and comment on whether your absence from work was directly caused by the accident. The type of medical expert will depend on the symptoms you have suffered as a result of the accident, which have prevented you from working. If you have been unable to return to work for an unrelated reason, it is still possible to claim for your loss of earnings, but only for the period which was caused by the accident.
What about work in the future?
If you have suffered a serious injury, it is standard practice for a medical expert to provide their opinion as to whether you are disadvantaged on the open labour market due to your accident-related injuries. This would mean that if you were out of work and looking for another job, it would likely take you longer to secure one as the potential range of jobs open to you is more limited due to your injury. In this situation it is possible to bring a claim for this potential loss of earnings capacity, termed a ‘Smith v Manchester’ award. For this head of claim to succeed, it is necessary to show not just that you are disadvantaged, but also that there is a real risk that you will lose your job. This is an often-disputed head of claim which is why it is always important to get legal advice.
What if I will be unable to return to work?
If a medical expert confirms that you are unable to return to work at all due to the severity of your injuries, then a claim for future loss of earnings will be made. This will take into account the estimated age at which you would have retired, but for the accident, and a calculation will be made based on the relevant period. Inflation will also be taken into consideration to ensure that you receive the right level of compensation, based on the earnings you would likely have made, but for the accident. This involves determining the relevant ‘multiplicand’ using the Ogden tables, which factor in various elements such as age, gender, and life expectancy.
Pension loss
If you have suffered a loss of earnings, it is likely that you will also have lost pension contributions. As the majority of people now have workplace pensions this is an important head of claim to consider, especially if you have been unable to continue working, or had to change jobs to one with a less favourable pension plan. Claims for both past and future loss of pensions can be considered.
Loss of other benefits
If you have had to change jobs as a result of your injuries, then you may also have had to give up other employee benefits. It is important that you tell your solicitor of any such losses so that this can also be considered when valuing your claim.
Here at Stephensons our personal injury specialists have many years of experience handling all types of injury claims including those for loss of earnings. Call us now on 0161 696 6235 or complete our enquiry form.
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