Lost Wage & Economic Loss Report
Calculates all economic damages in a personal injury matter, structured to withstand scrutiny from opposing counsel, insurance adjusters, experts, and the court.
Prerequisites
Gather before starting:
- Medical records — diagnoses, treatment notes, prognosis, work restrictions, permanency opinions
- Employment/wage records — pay stubs (12-24 months pre-injury), W-2s, tax returns, employer verification letters
- Medical bills — itemized bills, EOBs, payment records
- Incident documentation — date, location, nature of injury-causing event
- Expert reports (if available) — vocational evaluations, life care plans, economist reports
Workflow
- Extract claimant profile and injury facts from case documents
- Build pre-injury earnings baseline from employment records
- Calculate past lost wages (injury date through present/MMI)
- Project future economic loss and diminished earning capacity
- Tabulate past and future medical expenses
- Quantify other economic losses (household services, transport, modifications)
- Compile damages summary with conservative and aggressive scenarios
- Generate exhibit list with source citations
Output Structure
1. Claimant Profile
| Element | Include |
|---|---|
| Identity | Full name, DOB, contact |
| Incident | Date, location, nature, parties |
| Injuries | Diagnoses, treatment timeline, current status, prognosis |
| Permanent impairments | Work restrictions with physician quotes and citations |
| Scope | Time periods covered; past vs. future losses |
Cite source document and page for every fact. Flag gaps for follow-up discovery.
2. Pre-Injury Earnings
Extract from pay stubs, W-2s, tax returns, employer letters:
| Component | Method |
|---|---|
| Base wage/salary | Rate + raise dates |
| Overtime | 12-24 month pre-injury average, month-by-month |
| Bonuses/commissions | Payment patterns and amounts |
| Benefits | Health insurance, retirement contributions |
| Secondary income | Affected side employment |
Output monthly/quarterly earnings table: Period | Base | Overtime | Bonus/Commission | Total
Note seasonal variations and advancement trajectory.
3. Past Lost Wages
Calculate from injury date through present or MMI: Net Lost Wages = "But-For" Earnings − Actual Earnings Received.
"But-for" earnings include: regular wages, predictable overtime, scheduled raises/COLAs, expected bonuses.
Offsets: modified-duty wages, STD/LTD payments, workers' comp TD, alternative employment earnings.
Output table: Month/Quarter | But-For Earnings | Actual Earnings | Net Lost Wages | Running Total
Additional items: lost health insurance (replacement cost), lost retirement contributions, lost PTO/benefits, tax implications (gross vs. net per jurisdiction).
Flag estimated periods with basis for estimation.
4. Future Loss & Diminished Earning Capacity
| Factor | Source |
|---|---|
| Work-life expectancy | Age, occupation, pre-injury health |
| Recovery timeline | Treating physician opinions |
| Permanent restrictions | Medical records, vocational expert |
| Post-injury capacity | Vocational assessment, labor market data |
Temporary future losses: Project from medical opinions; apply past-wage methodology with growth factors.
Permanent diminished capacity: Annual Loss = Pre-Injury Trajectory − Post-Injury Capacity. Present value = sum of (Annual Loss × Discount Factor) over work-life expectancy.
Include: wage growth rate, career advancement, lost benefits, jurisdiction-appropriate discount rate (cite source).
Show table: Year | Projected Loss | Discount Factor | Present Value
Provide sensitivity analysis varying recovery timeline, earning capacity, discount rate, work-life expectancy. Label conservative vs. aggressive scenarios.
5. Medical Expenses
Past: Table with Date | Provider | Service Type | Billed | Insurance Paid | Out-of-Pocket | Status. Categories: emergency, hospitalization, surgery, physician visits, PT/rehab, diagnostics, prescriptions, DME.
Future: Source from physician opinions or life care plan — ongoing therapy, future surgeries, long-term medications, equipment, monitoring. Present both nominal and present value totals.
6. Other Economic Losses
| Category | Method |
|---|---|
| Household services | Hours/week × market rate per type |
| Transportation | Visit count × mileage rate + parking |
| Home modifications | Receipts/estimates for ramps, bathroom, adaptive equipment |
| Miscellaneous | OTC medications, supplies, damaged property |
Distinguish past (incurred) vs. future (projected).
7. Damages Summary
| Category | Amount |
|---|---|
| Past Lost Wages (date range) | $ |
| Future Lost Wages / Diminished Capacity (PV) | $ |
| Past Medical Expenses | $ |
| Future Medical Expenses (PV) | $ |
| Household Services (past + future) | $ |
| Transportation | $ |
| Home Modifications / Other | $ |
| TOTAL ECONOMIC DAMAGES | $ |
Include gross and after-tax totals if jurisdiction requires. Add 1-2 paragraph narrative on key damage drivers. Present conservative and aggressive scenarios with recommended figure labeled.
8. Exhibit List
Sequential by category: employment/wage docs, medical records/bills, expert reports, receipts/invoices, other.
Format: Exhibit # | Description | Date | Relevance to Calculation
Critical Rules
- Every figure cites a source — document name, date, page
- Show all formulas and assumptions — calculations must be replicable
- No advocacy language — let numbers speak; maintain objectivity
- Discount rates — jurisdiction-appropriate; state source
- Plaintiff-side but credible — conservative methodology builds credibility
Common Pitfalls
- Missing mitigation evidence — always document claimant's return-to-work attempts
- Pre-existing conditions — explicitly distinguish pre-existing vs. injury-caused limitations
- Earnings anomalies — explain any pre-injury income irregularities
- Unsupported projections — ground all future estimates in documented medical opinions
- Jurisdiction variance — tax treatment, discount rate standards, and gross-vs-net rules vary by state; confirm applicable rules
- Gaps not flagged — identify where additional discovery, vocational evaluation, life care plan, or economist report would strengthen the analysis