BC Court of Appeal: Chau v. Courchesne Earning Capacity Reduction by $350K

• The British Columbia Court of Appeal reduced a taxi accident damages award by $350,000, primarily by adjusting the lost future earning capacity component.
• In Chau v. Courchesne, 2026 BCCA 345, the appellate court found the trial judge erred by using an incorrect base salary assumption for future earning capacity calculations.
• The court recalculated the lost future earning capacity, applying a 10% reduction for general contingencies and another 10% for residual earning capacity, bringing the award to $2.55 million.
• Despite a legal error by the trial judge, the appellate court affirmed that the appellants failed to prove the passenger was contributorily negligent for not wearing a seatbelt.
• Other aspects of the original damages award, including past loss of earning capacity, future care costs, and mitigation of damages, were upheld by the Court of Appeal.

The ruling underscores the meticulous approach taken by the British Columbia Court of Appeal in assessing lost future earning capacity, particularly concerning base salary assumptions and contingency deductions.

The British Columbia Court of Appeal has significantly adjusted a personal injury award stemming from a 2017 taxi accident, reducing the total damages by $350,000. This decision, detailed in the case of Chau v. Courchesne, 2026 BCCA 345, primarily focused on a recalculation of lost future earning capacity. The incident occurred on October 29, 2017, when a vehicle collided with a taxi from behind, causing physical, psychological, and cognitive injuries to a passenger.

The respondent, who at the time served as the chief executive officer of the Canadian Dermatology Association, was a passenger in the taxi and was not wearing a seatbelt. Following a trial in the Supreme Court of British Columbia, a judge awarded approximately $3.75 million in damages on November 9, 2023. The appellants, comprising the company that owned the striking vehicle and its employee driver, subsequently challenged this award.

The appellate court allowed the appeal on the singular ground that the trial judge had erred in determining the award for lost future earning capacity. Consequently, the court reduced this specific component of the damages from $2.9 million to $2.55 million. While other grounds of appeal and the respondent's cross-appeal were dismissed, the appellants were awarded costs for both the appeal and cross-appeal due to their substantial success on the primary issue.

The core of the British Columbia Court of Appeal's decision in Chau v. Courchesne revolved around a meticulous re-evaluation of the respondent's lost future earning capacity. The court identified a critical error in the trial judge's assessment, specifically regarding the base salary used for calculations. The trial judge had incorrectly assumed a higher base salary than the accepted $200,000 per year and had included a rejected assumption that the respondent would have earned a $230,000 base salary.

In correcting this error, the appellate court established the total net present value of the loss, prior to any deductions, at $3,182,453.19. From this figure, the court applied two distinct reductions: a 10 percent deduction for general contingencies and an additional 10 percent for residual earning capacity. This rigorous approach in the lost future earning capacity appeal BC ultimately led to a revised figure of $2,545,962.55, which was then rounded up to $2.55 million. The court explicitly deemed the 10 percent general contingency reduction to be reasonable in this context, setting a clear precedent for future personal injury damages assessment BC.

Despite the significant adjustment to the damages award, the British Columbia Court of Appeal upheld the trial judge's finding that the passenger was not contributorily negligent for not wearing a seatbelt. The appellants had argued that the respondent's failure to use a seatbelt contributed to her injuries. While the appellate court acknowledged that the trial judge made a legal error by deeming the seatbelt and headrest issues mutually exclusive and by considering it speculative to attribute injury causation to seatbelt non-use over the headrest, this did not alter the final outcome on this point.

The court determined that even with the trial judge's error, the appellants failed to provide sufficient evidence to prove, on a balance of probabilities, that the respondent's failure to wear a seatbelt caused her concussion or other injuries. This ruling reinforces the high evidentiary bar for establishing contributory negligence seatbelt BC claims, confirming that mere non-use is not enough; a direct causal link to the specific injuries must be demonstrated.

Beyond the lost future earning capacity, the British Columbia Court of Appeal reviewed several other aspects of the initial damages award, ultimately finding no reviewable errors in the trial judge's decisions on these points. The court affirmed the trial judge's determination regarding past loss of earning capacity, accepting the respondent's 2019 annual salary at $200,000, along with a 2.5 percent cost-of-living increase.

Similarly, the appellate court upheld the trial judge's finding that the respondent had not adequately proven her need for 30 years of future care treatment. Furthermore, the court rejected the appellants' argument that the respondent failed to mitigate her damages. This comprehensive review by the British Columbia Court of Appeal damages reduction ruling underscores the judiciary's detailed scrutiny of all components of personal injury claims, even as it makes targeted adjustments based on specific legal and factual errors.

Personal injury lawyers in British Columbia should note the BC Court of Appeal's detailed scrutiny of lost future earning capacity calculations, particularly regarding base salary assumptions and contingency deductions. The ruling also reinforces the high evidentiary bar for proving contributory negligence related to seatbelt non-use.

Source: Original reporting via Canadian Lawyer