Liao, Che-Hun

According to Article 193(1) of the Civil Code in Taiwan, "Anyone who wrongfully damages the body or health of another, causing the injured person to lose or decrease their earning capacity (referred to as 'earning capacity' in foreign laws), or increase their living expenses, shall be held responsible for any resulting injury and provide compensation to the injured person." However, there are different legal theories on how to characterize the loss or reduction of earning capacity, and currently, Taiwan's judicial practice adopts the "devaluation of human capital" view. Under this view, earning capacity is considered a type of property or asset in reality. When it is fully or partially lost, the decrease in its value is calculated to determine the actual compensation amount. This enables the concept of "reduction of earning capacity" to be implemented as a concept of property damage. Nevertheless, although the judicial practice mostly uses a formula (the actual income of the individual multiplied by the Hoffman coefficient of the original calculable working years multiplied by the percentage of the loss or reduction of earning capacity) to determine the compensation amount, how the formula is derived, how the actual income of the individual is evaluated, and what factors are considered in determining the percentage of "loss or reduction of earning capacity" have yet to be fully analyzed and quantitatively studied.
In addition to analyzing the formula for calculating compensation for loss of earning capacity, this study selected a total of 297 civil first-instance judgments from the Legal Information Retrieval System of the Judicial Yuan in Taiwan between January 1, 2011, and December 31, 2014, to explore the hidden meanings in the data and statistics presented in these judgments through statistical methods. The purpose was to organize, present, analyze, and interpret the data and statistics in these judgments. The research findings indicate that using the above formula to predict the future income changes resulting from the loss or reduction of earning capacity due to personal injury is an unavoidable practice in practice. However, the multiplier (i.e., the actual income of the individual) is often estimated based on the claim of legal relations of the lawsuit and is usually the "basic wage" of the victim. This results in an excessively low actual income of the victim, which is unfavorable to their claim for compensation for loss of earning capacity. Moreover, the historical practice of using the "Attachment of the Labor Insurance Disability Benefit Payment Standards" to estimate the degree of loss or reduction of earning capacity further undermines the accuracy of the compensation amount calculated using the above formula to reflect the actual situation of the victim's injury-related loss or reduction of earning capacity. Therefore, after weighing and comparing the current evaluation methods used by the first-instance courts regarding this degree (as a percentage from 0% to 100%), this study suggests using the American Medical Association Guidelines (AMA Guides), specifically the California Workers' Compensation, as a basis to determine the percentage of loss or reduction of earning capacity. This may be a better approach to address the discrepancy between the compensation amount for loss or reduction of earning capacity and the actual loss or reduction of earning capacity in practice

Human Capital Theory and Its Role in Assessing Damages for Loss of Earning Capacity: A Judicial Review

Abstract

Similar works

Full text

Available Versions

Thesys