Award of loss of earning capacity as a form of damages.

See -  https://www.manilatimes.net/2021/01/07/legal-advice/dearpao/loss-of-earning-capacity/823912/



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In Abrogar vs Cosmos Bottling Company and Intergames Inc. (GR 164749, March 15, 2017), ponencia of Chief Justice Lucas Bersamin, the Supreme Court held that loss of earning capacity may be awarded to the heirs of a deceased non-working victim simply because earning capacity, not necessarily actual earning, may be lost, viz:

“The RTC (Regional Trial Court) did not recognize the right of the petitioners to recover the loss of earning capacity of Rommel. It should have, for doing so would have conformed to jurisprudence whereby the Court has unhesitatingly allowed such recovery in respect of children, students and other non-working or still unemployed victims. The legal basis for doing so is Article 2206 (1) of the Civil Code, which stipulates that the defendant shall be liable for the loss of the earning capacity of the deceased, and the indemnity shall be paid to the heirs of the latter; such indemnity shall in every case be assessed and awarded by the court, unless the deceased on account of permanent physical disability not caused by the defendant, had no earning capacity at the time of his death

“Indeed, damages for loss of earning capacity may be awarded to the heirs of a deceased non-working victim simply because earning capacity, not necessarily actual earning, may be lost. xxx.” (Emphasis supplied)

In Metro Manila Transit Corp. vs Court of Appeals (GR 116617, Nov. 16, 1998, 298 SCRA 495), penned by Associate Justice Vicente Mendoza, damages for loss of earning capacity were granted to the heirs of a third-year high school student of the University of the Philippines Integrated School, who had been killed when she was hit by a passenger bus as she crossed Katipunan Avenue in Quezon City. The High Court justified the grant in this wise:

“Compensation of this nature is awarded not for loss of earnings but for loss of capacity to earn money. Evidence must be presented that the victim, if not yet employed at the time of death, was reasonably certain to complete training for a specific profession. In People v[s] Teehankee, no award of compensation for loss of earning capacity was granted to the heirs of a college freshman because there was no sufficient evidence on record to show that the victim would eventually become a professional pilot. But compensation should be allowed for loss of earning capacity resulting from the death of a minor who has not yet commenced employment or training for a specific profession if sufficient evidence is presented to establish the amount thereof.” (Emphasis supplied)

And in Pereña v[s] Zarate (GR 157917, Aug. 29, 2012),also written by Bersamin, the Court fixed damages for loss of earning capacity to be paid to the heirs of the 15-year-old high school student of Don Bosco Technical Institute killed by a moving train. The RTC and the Court of Appeals had awarded damages for loss of earning capacity computed on the basis of the minimum wage in effect at the time of his death. Upholding said findings, the Supreme Court opined:

“xxx, the fact that Aaron was then without a history of earnings should not be taken against his parents and in favor of the defendants whose negligence not only cost Aaron his life and his right to work and earn money, but also deprived his parents of their right to his presence and his services as well. xxx. Accordingly, we emphatically hold in favor of the indemnification for Aaron’s loss of earning capacity despite him having been unemployed, because compensation of this nature is awarded not for loss of time or earnings but for loss of the deceased’s power or ability to earn money.” (Emphasis supplied)

Thus, following the above-mentioned jurisprudence, you may claim the loss of earning capacity of your deceased daughter. The fact that she was still a student and unemployed should not negate her heirs’ right to claim damages in the form of loss of earning capacity precisely because compensation of this nature is awarded not for the loss of time or earnings but for the loss of the deceased’s power or ability to earn money.

For your guidance, the formula in computing the loss of earning capacity as discussed in People vs Reanzares (GR 130656, June 29, 2000), penned by Associate Justice Josue Bellosillo, is: loss of earning capacity = [2/3 x (80 – age of the deceased)] x 1/2 annual gross income.

Succinctly, the step-by-step guide to compute an award for loss of earning capacity dictates:

“(1) Subtract the age of the deceased from 80.

“(2) Multiply the answer in (1) by 2, and divide it by 3 (these operations are interchangeable).

“(3) Multiply 50 (percent) to the annual gross income of the deceased.

“(4) Multiply the answer in (2) by the answer in (3). This is the loss of earning capacity to be awarded.” (People vs Wahiman, GR 200942, June 16, 2015, Associate Justice Marvic Mario Victor Leonen’s concurring opinion).

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