Occasionally, I represent injured persons who are owners of their own business or professional practice that have suffered a loss in profits or fees due to their injuries.
A negligent party will be responsible to compensate an injured person for any economic loss that is reasonably related to their inability to work. Aside from “pain and suffering,” a defendant is responsible for such economic loss, but the burden of proving that loss is on the plaintiff.
In order to prove “lost profits,” the plaintiff needs to do the following:
- Provide tax returns which reflect a reduction of income during the tax year that the plaintiff was injured. For example, if a sales person did not work for three months and consistently earned $1,000 per month via a steady sales source, then that amount may be compensable.
- Provide a statement from your accountant that reflects the diminished income during the period of time that the injured person was unable to work.
- If a plaintiff needed to hire another person to perform the work, then checks and / or contracts should be provided;
- You may need to retain a forensic accountant that can explain how you suffered an economic loss. If you were not paid on contracts, for example, that would be evidence of a loss.
- Business loans can be used as proof that the plaintiff was caused to borrow money to sustain their business or practice.
All of the above is subject to proof of injury that prevented the plaintiff from performing their work activities.