Earning Capacity Assessment: A Defensible Methodology

The first task is to describe what the individual was capable of earning before the event. This baseline rests on documented education, certifications, and a detailed work history, including job titles, duties, exertional demands, and wage progression. Where the record allows, the evaluator characterizes the person's established occupation and any reasonable career trajectory supported by their history rather than by speculation.

The baseline is expressed in terms of occupations and wage ranges that the labor market data support, not a single number presented without context. Stating the baseline as a defensible range, with the basis for each endpoint, allows the opinion to be examined on its own terms.

Post-event capacity is assessed by integrating the medical record, any functional capacity findings, and the individual's own report of activity tolerance with the requirements of work. The evaluator identifies which prior occupations remain accessible, which are foreclosed, and which alternative occupations are realistic given the residual functional profile.

This step is explicitly tied to restrictions that the medical evidence supports. An opinion that assumes limitations the record does not establish, or that ignores limitations the record does establish, is not defensible. The evaluator states which medical sources were relied upon and how each restriction was translated into a vocational consequence.

Transferable skills analysis is the structured method for determining which work-related skills acquired in prior jobs can carry over to other occupations within the person's residual capacity (Truthan & Karman, 2003). It connects the documented work history to specific alternative occupations using recognized occupational classifications and their associated worker traits (National Center for O*NET Development, n.d.; U.S. Department of Labor, Employment and Training Administration, 1991).

Done well, the analysis is reproducible: another qualified evaluator working from the same record should be able to follow the path from prior jobs to identified alternatives. This is one of the points at which opinions are most often tested, so the basis for each transferable skill and each candidate occupation is documented rather than asserted.

Identified occupations are tested against the labor market in the relevant geography. The evaluator considers wage levels, the presence of the occupation in the local and regional economy (U.S. Bureau of Labor Statistics, n.d.), and any access barriers such as licensure or typical hiring requirements. A labor market survey may be used to confirm that identified work exists and is realistically available, not merely theoretically possible.

Tying conclusions to observable wage and employment data, rather than to the evaluator's unaided judgment, is what allows the post-event capacity figure to be examined and, if appropriate, rebutted with competing data.

The credibility of an earning capacity opinion depends on the transparency of its record. A defensible report lists the records reviewed, the interview and any testing conducted, the occupational and wage sources consulted, and the assumptions made at each step. Where the record is incomplete or where reasonable professionals could reach different conclusions, the report says so.

Acknowledging limitations does not weaken an opinion. It signals that the methodology, not the desired result, drove the conclusion, and it gives the trier of fact an honest basis for weighing the evidence.

The vocational opinion produces the inputs a forensic economist needs: a pre-event earning capacity, a post-event earning capacity, and the vocational basis for any work-life or mitigation assumptions (Skoog et al., 2011). Keeping the vocational and economic analyses methodologically aligned, while each remains independent, produces a damages model that is internally consistent and easier to defend as a whole.