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By: Chuck Horn
California just changed the law on recovery of loss of earnings. Traditionally counsel, and experts, would look to the actual earnings history of the plaintiff, or plaintiff’s decedent, in the years before the accident or injury. Subpoenas and Requests for Production of Documents would seek the personnel file, the W-2s, the date of initial employment and pay rate, and the person’s wage-increase progress, promotions, and likely future promotions and pay raises, and information to calculate life expectancy. Then independent forensic economists would be given this information and would investigate the known statistics that apply to that person and calculate reasonably likely “past” earnings from the accident to trial, and reasonably likely “future” loss of earnings. Seems simple, right?
California has just changed the way all this works. The California legislature changed the law (Civil Code §3361, enacted by SB 41 in 2019) for civil damages for loss of earnings because the results of past practices “are a reflection of gender pay gaps and workforce discrimination,” and “perpetuate systemic inequalities” and “disproportionately injure women and minority individuals by depriving them of fair compensation,” recognizing that “[a]ny generalized reduction of civil damages using statistical tables alone, based on a plaintiff’s membership in a protected class identified in Section 51 of the Civil Code, is counter to the public policy of the State of California.”
Effective 01/01/2020 Section 3361 has been added to the California Civil Code, as follows: “Estimations, measures, or calculations of past, present, or future damages for lost earnings or impaired earning capacity resulting from personal injury or wrongful death shall not be reduced based on race, ethnicity, or gender.” This is a significant change to past practices of counsel and experts for all sides in civil litigation in California and must be taken into account in claim evaluation and trial preparation.
If you have any questions or would like more information, please contact Chuck Horn at [email protected].