When you are injured in an accident, you can claim for different categories of losses. These categories are called heads of damage. One of these heads of damage is called general damages (also known as non-pecuniary damages). General damages compensate you for intangible losses like pain and suffering. You may also be able to claim special damages (sometimes called pecuniary damages), which are intended to compensate you for actual monetary losses that you incurred due to your injuries. Examples of special damages include economic losses (like loss of earnings or wages) and medical expenses (e.g., physiotherapy bills from the time of the accident until the time of the trial). Other heads of damage may include future cost of care, loss of housekeeping capacity, and loss of consortium.
A common claim made in personal injury lawsuits is for loss of future income, also known as loss of earning capacity. This covers losses suffered by people who are employed or planning to enter the workforce, but what about those people who are homemakers or stay-at-home parents? How are their losses for loss of housekeeping capacity and future loss of income calculated?
Historically, homemaker plaintiffs were women (although not always and in modern society, this has changed). And until recently, courts making damage awards to homemakers often failed to recognize the value of women as working members of the community. Many of the problems in the court awards were gender-based: for example, marriage was treated by the court as the termination of a woman’s career, homemaking was not recognized for its function of indirectly producing income for a family, and childcare costs were offset against a woman’s projected earnings. All of these biases had the effect of lowering the damage award a woman working in a homemaking capacity would receive.
In the modern context, when making an award for damages, the focus of Canadian courts is on compensation. Courts are now mindful that the goal of contemporary damage awards is to put the injured party back in the position they would have been in if the injuries had not occurred. When awarding damages, the court now considers all aspects of working capacity and income loss, and they are more willing to take into account the valuable, albeit unpaid, contributions of homemakers and stay-at-home parents.
Future Loss of Income of a Homemaker or Stay-at-Home Parent
For a homemaker or stay-at-home parent to make a claim for future loss of income or loss of earning capacity, the homemaker must provide evidence to show that they would have returned to work if it were not for their injury. The Alberta Court of Appeal considered the issue in the 2015 case Chisholm v. Lindsay. The plaintiff was injured in a motor vehicle accident. At trial, she was awarded overall damages of $346,734. She appealed the amount of the judgment, arguing that the trial judge made a mistake in failing to grant her any amount for past loss of income and not awarding her enough for future loss of income.
The plaintiff had been a special needs teacher, and at the time of the accident, she was a stay-at-home parent with two young children. At issue was when she would have resumed full-time teaching but for the accident and but for the birth of her children. The trial judge awarded the plaintiff $125,000 in loss of income and earning capacity. The judge was satisfied that the plaintiff would have stayed at home with her children until the youngest child reached school age. The judge found that it was difficult (if not impossible) to determine what lasting impact her injury would have on her future earnings. It was also hard to determine if she would have returned to full-time work at all. In making the decision, the judge considered whether or not there was a “real and substantial” possibility that the plaintiff was less capable of earning an income, was less marketable to potential employers, and less able to take advantage of available employment opportunities because of her injuries.
The trial judge concluded that the plaintiff was still a relatively young woman who had many working years ahead of her and who would continue to suffer the effects of her injuries from the accident and she was less capable of earning an income because of them. The Court of Appeal agreed with the trial judge and upheld the plaintiff’s award of $125,000 for future loss of income.
Loss of Housekeeping Capacity
The courts have also begun to recognize the real value of the services a homemaker provides and to compensate homemakers accordingly. In the 1994 Alberta case McLaren v. Schwalbe, the trial judge expressed admiration for the ability of homemakers to accomplish multiple tasks at the same time, such as cook a meal and supervise children. The judge stated that the functions performed by a homemaker defy a job description: they are both labour and management. He said that it does not matter that a homemaker’s work is not carried out in the marketplace or that he or she is not paid in money. The reality that a homemaker’s services are unpaid does not mean that they cannot be valued and that this loss cannot be reflected in a damage award. To assess the value of damages for loss of homemaking capacity, the court must estimate the cost of replacement services and then multiply this cost by the life expectancy of the plaintiff. In making the award, it is immaterial whether these damages are actually used to hire the replacement services or not.
The bottom line is that just because you were not engaged in the paid workforce at the time of your injuries, does not mean that your work as a stay-at-home parent or homemakers has no value in the eyes of Alberta courts. There is an increasing willingness to recognize that the activities that occur in support of a spouse or family member’s ability to engage in traditional paid work do have value and should be compensated.
If you are a homemaker or stay-at-home parent who has been injured in an accident and you have questions about what you are entitled to claim as damages, please contact CAM LLP for a free consultation.