Plaintiff broke his arm after he fell off a cabinet when he was five years old
The BC Court of Appeal has increased an award of loss of future earning capacity for a plaintiff who broke his arm as a child, resulting in deformity due to negligent surgery.
In McKee v. Hicks, 2023 BCCA 109, Maxwell McKee broke his right arm just above the elbow when he was five years old after he fell off a kitchen cabinet. He was an active child diagnosed with ADHD when he was nine years old, and type 1 diabetes he was about ten. Dr. Tracy Hicks, an orthopedic surgeon, negligently performed a closed reduction and casting of the fracture resulting in a malunion of the bones, creating a deformity of McKee’s elbow.
Another pediatric orthopedic surgeon said correcting the deformity would be too risky. The surgeon also explained that the deformity would persist with possible long-term outcomes, including vulnerability to posterolateral rotary instability.
Dr. Hicks admitted liability. The trial judge awarded McKee $65,000 for loss of future earning capacity and $110,000 for non-pecuniary damages, which included the difficulties McKee might experience with heavier household tasks. The judge did not make a separate award for loss of future housekeeping capacity.
McKee appealed the judge’s award for his loss of future earning capacity and the judge’s failure to make a separate award for his loss of housekeeping capacity. The BC Court of Appeal affirmed the judge’s decision regarding the loss of housekeeping capacity but found that the judge made an error in assessing McKee’s loss of future earning capacity.
Three-step test
In 2020, McKee began working as an apprentice electrician at Horizon Electric. He experienced pain, tightness, and a popping sensation in his elbow but could discharge all his duties without missing any work due to his symptoms.
McKee argued that the judge made an error in assessing the award for loss of earning capacity by failing to apply the appropriate principles to evaluate the loss.
The appeal court explained the three-step process the judge used to assess McKee’s loss of future earning capacity:
- Whether the evidence discloses a potential future event that could lead to a loss of capacity
- Whether on the evidence, there is a real and substantial possibility that the future event in question will cause a pecuniary loss
- Assessment of the value of the possible future loss, which includes assessing the relative likelihood of the possibility occurring
The judge found that McKee satisfied the first two steps. Based on expert opinion, the judge that there was a “likely risk” that McKee would develop “some complications in the future.” The judge also found that there is a risk that McKee will have fewer opportunities available to him in the future because of these possibilities of complications.
McKee contested the judge’s assessment of the value of his possible future loss, arguing that the judge incorrectly rejected the earnings approach to assessing his loss of future earning capacity.
Relevant economic factor
The appeal court found that the judge correctly rejected the earnings approach and adopted the capital asset approach. However, the court found that the trial judge failed to consider available and highly relevant economic evidence in measuring McKee’s loss of future earning capacity. The judge’s error led her to make an inordinately low and wholly erroneous estimate of McKee’s loss.
The appeal court pointed out that the judge’s award of $65,000 for loss of future earning capacity reflected only a very slight possibility that McKee would require accommodations from prospective employers that may result in him working less often or for a shorter period. Further, the award failed to make any provision that McKee may have to switch careers.
The court noted that given McKee’s young age, it is impossible to identify with specificity all of the real and substantial possibilities concerning his career paths with and without injury. One of the factors that the court considered was that due to Dr. Hick’s negligence, there was a real and substantial possibility that McKee would require more significant accommodations resulting in him working less often or for a short period or switching careers.
The court pointed out that McKee was five years old when he broke his arm and was 19 years old during the trial. The risk of complications was likely to develop in the near future but at a time when McKee is earning significantly more than a first-year apprentice.
Based on the judge’s findings of fact, the court placed the impairment of McKee’s without-injury earning capacity at approximately 10 percent, which equates to $310,000. The court then applied a 20 percent negative contingency to account for the judge’s concerns about the low apprenticeship completion rates. Ultimately, the court awarded McKee $250,000 for his loss of future earning capacity.
