In Georgia injury lawsuits, how is future loss of earning capacity calculated for self-employed individuals?
With tax returns, business records, and an expert, because a self-employed person’s income isn’t just a paycheck. O.C.G.A. § 51-12-2(b) requires proof of special damages, and § 51-12-13 allows future loss to be discounted, at 5 percent “or any other discount rate as the trier of fact may deem appropriate.” An economist and a vocational expert may project what the person could have earned, compared with now. Revenue isn’t profit, so the claim is built on net income and capacity.
Proof
| Item | Why |
|---|---|
| Tax returns, several years | Baseline |
| Profit and loss statements | Net income |
| Client records | Lost work |
| Bookkeeper or CPA | Foundation |
| Doctor's restrictions | Limits |
| Vocational expert | What's possible now |
| Replacement labor costs | Cost of hiring |
The tax return problem
If returns report low income, and the plaintiff claims a higher one, that’s a credibility problem, and it may raise other issues. Georgia law doesn’t let a claim rest on speculation. Ask a lawyer before claiming unreported income.
Business losses versus personal loss
Profits from a business may depend on others’ work and capital. Only the part that comes from the plaintiff’s own labor is the loss. An expert can separate it. Fixed costs may need to be examined, too.
Time horizon
Work-life expectancy, business cycle, and age matter. Life tables are admissible under O.C.G.A. § 24-14-45. Personal injury awards are reduced by fault under § 51-12-33(a).
Mitigation
Section 51-12-11 says that one “must mitigate his damages as far as is practicable”. Shifting to office work, hiring help, or changing the business may be raised.
Reliability
Under § 24-7-702(b), opinions need sufficient facts and reliable methods. A projection based only on the plaintiff’s hopes is vulnerable, and a new business without a record is harder.
Discovery
Expect requests for bank records and client lists. Ask for a protective order under § 9-11-26(c) for trade secrets.
Insurance
Loss of income coverage on business policies may help, and may lead to subrogation. Tell your lawyer.
General information about Georgia law as of November 2026. It is not legal advice and does not create an attorney-client relationship.