Lost productive years

Lost productive years

Lost productive years is the term in which people cannot work due to injuries or sickness caused by a traffic accident.

Compensation for lost wages due to Residual Disability

Lost wages due to Residual Disability refer to the money you would have earned if you weren't left with Residual Disability by a traffic accident. It's calculated based on the following formula:

Annual Income * Lost productivity rate * Leibniz Coefficient (Lost Productive years)

The annual income shown in the formula is the victim's annual income. Generally, it's the income of the preceding fiscal year. The lost productivity rate is the rate of decrease in income due to residual disability. It is usually determined by the grade of residual disability.

Lost productive years

Lost productive years are the term your income decreases due to the residual disability left by a traffic accident. For the determination of the amount of compensation, it's needed to expect how many years your income will decrease due to the residual disability. The lost productive years often become a problem in compensation for traffic accident victims, because there is no definite standard for the determination.

In principle, the lost productive years are limited up to 67 years of age or the average life expectancy, but it's appropriate to determine it on an individual basis according to the degree of the residual disability.

For example, if your grade of residual disability is 14th(9), the lost production years are determined to be 2-5 years. If the grade is 12th(12), the lost production years are determined to be 5-10 years. Neurological symptoms are determined to be fewer years because it's considered to recover someday fully. Most of the voluntary insurance companies suggest about three years to 14th grade and 5-7 years to 12th grade. In my experience, it is relatively easy to make 12th grade (13) into ten years, but it is challenging to make 14th grade (9) into five years.

In any of the cases, traffic accident victims have to fully study judicial precedents when settling the case with the at-fault party.