Dr. Michael Sumner

Liberty Mutual appealed an arbitration order requiring it to pay a loss of earning capacity benefit based on a pre-accident earning capacity of $31,000 and a residual earning capacity of zero.

The Director's Delegate upheld the finding of zero residual earning capacity, noting it was supported by evidence that the claimant could not work reliably or consistently.

However, the Delegate allowed the appeal regarding pre-accident earning capacity, finding the Arbitrator erred in law by failing to consider the credibility of the claimant's undocumented assertion that she was about to open a third gas station.

The issue of pre-accident earning capacity was remitted to the Arbitrator.

The applicant was injured in a motor vehicle accident and sought a loss of earning capacity benefit (LECB) from the insurer.

The parties disputed the applicant's residual earning capacity (REC) and pre-accident earning capacity (PEC).

The arbitrator found that the applicant suffered from severe migraines and cognitive deficits, rendering her unable to sustain competitive employment, resulting in a REC of $0.

The arbitrator determined her PEC to be $31,000 based on her best 52 weeks of reported income plus expected income from a new business location.

The insurer was ordered to pay the LECB based on these figures, indexed for inflation.

Additionally, the arbitrator awarded a $500 special award against the insurer for unreasonably relying on an outdated and inaccurate assessment to make a low LECB offer.