30/09/2026
A motor vehicle accident can have consequences that extend far beyond the physical injuries sustained by an accident victim. Where an injury affects a person’s ability to work and earn an income, the financial consequences may continue for many years after the accident.
The purpose of compensation is not to provide the claimant with a windfall. Rather, the objective is to place the claimant, as far as money can, in the position in which they would have been had the accident not occurred.
In South African Road Accident Fund litigation, a claimant may therefore seek compensation for past loss of earnings as well as future loss of earnings or diminished earning capacity, provided that the applicable legal and evidentiary requirements are satisfied.
These expressions are frequently used interchangeably; there is an important distinction between loss of earnings and loss of earning capacity.
Loss of earnings:
Loss of earnings generally concerns actual income that the claimant has lost as a result of the accident, like if the claimant couldn’t work for six months following the accident they lose six months salary.
Loss of earning capacity:
A claimant may return to work and continue receiving an income, the injuries may nevertheless have reduced their ability to compete in the labour market or progress in their chosen career
Loss of earning capacity claims involving children can be more complex because a child may not yet have entered the workforce.
In such circumstances, experts may consider factors such as the child’s educational background, academic potential, family circumstances and other available evidence when assessing the likely career and earnings the child could reasonably have achieved.
Future loss of earnings is generally more complicated because it requires the court to make a prediction about the claimant’s future.
