Mitigation Earning Capacity

Toppino, David C. 1999. “Mitigation Earning Capacity.” The Earnings Analyst  2: 55-72.


In cases involving wrongful termination, sexual harassment, employment discrimination, medical malpractice, personal injury, product liability and marital dissolution, the plaintiff’s mitigation earning capacity is a critical earnings loss factor. A vocational expert (VE) is generally responsible for evaluating pre and post incident earning capacity and can often clarify issues related to the nature of the mitigation effort. There are three primary vocational methodologies used to assess mitigation earning capacity. The first was defined by Everett Dillman as a functional loss of earning capacity model (Dillman 1987). The second paradigm is called the vocational rehabilitation model, and was perhaps best described by Robert Metcalf, a founder of the American Rehabilitation Economics Association. Here, the VE contrasts a) pre-incident demonstrated earnings to post incident demonstrated earnings, if applicable, and b) pre-incident earning capacity, if applicable, to post incident earning capacity. The third general methodology is a medical impairment model which assumes the percentage of medical impairment corresponds to loss of earning capacity (LOEC). Depending on the nature of the incident, there may be as many as six primary sources of data useful in the determination of mitigation earning capacity. Used in combination with public wage rate data from the Bureaus of the Census and Labor Statistics, the VE can develop a powerful process to validly and reliably establish the plaintiff’s mitigation earning capacity.


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