Every loss of earnings claim comes down to two lines on a graph.
The first is the career the claimant would have had if the accident did not occur. The second is the career they will likely have, now that the accident has occurred. The gap between them, discounted to the present value, is the loss-of-earnings claim.
Drawing those lines is less about arithmetic than about shape. Where would the earnings have started? How steeply would they have risen? At what point would they have levelled off? And at what age would the claimant have stopped working altogether?
The Actuary and The Industrial Psychologist
Those answers come from the industrial psychologist (IP), not from us. Our job at Vector Actuaries is to price the opinion, not to form it.
This is why an IP report that commits to a clear career ceiling and a retirement age is worth far more than one that leaves them open. Without defined parameters, the mathematical model becomes highly sensitive to small shifts in assumptions, leading to drastically different quantifications.
The Trajectories in Practice
The shape of the curve changes dramatically depending on the nature of the claimant’s employment.
Case Study 1: The Structured Corporate Path
A structured career progression (such as a junior analyst moving into middle management) offers a clear, easy to model path.
Uninjured: The trajectory typically shows a steady incline during the claimant’s 20s and 30s, eventually plateauing at a defined career ceiling (e.g., a Paterson D-band) until retirement age.
Injured: The injured line might cap out significantly earlier or reflect prolonged periods of unemployment due to physical or cognitive deficits, creating a wide, predictable gap.
Case Study 2: The Informal Earner
The hardest cases are the informal earners – those with no payslip, no IRP5, and no contract.
The Challenge: Here, the model cannot rely on a proven, historical income baseline.
The Solution: The valuation rests entirely on published earnings scales rather than proved income. The choice between using general corporate scales (like Paterson) versus localized informal scales (such as the Koch Quantum Yearbook guidelines) can outweigh every other assumption in the case. Misaligning the scale applied to the IP’s narrative can skew the final quantum by millions of Rands.
Ultimately, a defensible quantification relies on a seamless translation of the IP’s narrative into the actuarial model. Precision in shaping the trajectory means precision in the final claim.
Visualizing the Quantum
The tool below illustrates how these trajectories take shape. You can explore how different career paths and injury severities impact the ultimate loss calculation.
Earnings Trajectory Visualizer
Earnings Trajectory Visualizer
Securing the Quantum Your Client Deserves
A defensible calculation requires more than just plugging numbers into a formula—it requires a seamless translation of the industrial psychologist’s narrative into a robust mathematical model. Don’t let an ambiguous career trajectory or a mismatched earnings scale leave a loss of earnings claim vulnerable to under-settlement.
At Vector Actuaries, we specialize in bridging the gap between expert medical-legal opinions and precise actuarial valuations. Whether you are dealing with a structured corporate earner or a complex informal trader, we deliver models built to stand up to rigorous legal scrutiny.
Ensure your next loss of earnings quantum is precise, predictable, and fully supported.
Connect with our team today to bring mathematical certainty to your personal injury cases.
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