What is loss of earnings or profit (“lucro cesante”) and how is it calculated?

Question

José Manuel Alburquerque · Accepted Answer

It is the gain that is lost as a result of damage, such as income for the days on which you cannot work or what a business fails to earn while it is closed. It is different from actual loss (“daño emergente”), which is what is lost or spent, such as the cost of repair. It is calculated on the basis of net profit, that is, what would have been earned minus the expenses saved. The courts only award it if the gain was probable in the normal course of events and it is proved, usually with documents. When it is paid It must be a gain that would reasonably have been obtained. The courts reject mere expectations, which they sometimes call “sueños de ganancia” (dreams of profit). What was going to be earned under a contract already concluded that is lost because of the damage can be claimed. Customers you were only hoping to win, hardly ever. It must be due to the damage and not to other causes, such as a bad season for the business. It must be proved with payslips, tax returns, accounts, contracts or invoices. Without documents, it will not normally be paid. If the amount is significant, a report from an expert economist is also usually advisable. In a 2023 opinion, the “Comissió Jurídica Assessora”, the Catalan government's legal advisory body, rejected an injured person's claim for it because the payslips from before the accident were missing. How it is calculated If you are an employee, what you would have been paid is compared with what you were actually paid during that time, using your payslips from before and after. If you are self-employed or have a business, the net profit for comparable periods is used, such as the same months of the previous year, based on income tax and VAT returns or the accounts. If it is a work vehicle, such as a taxi or a delivery van, the number of days it was off the road is multiplied by the net profit per day. For example, 10 days off the road with a profit of 150 euros a day, after deducting fuel and other expenses, comes to 1.500 euros. In road traffic accidents, the statutory compensation scale (the “baremo”) has its own rules, which start from net earnings from work in comparable periods of the previous year. If the damage prevents you from earning the same in the future, for example because of after-effects, that loss is also compensated. It is not the same as loss of chance When it cannot be known whether anything would have been earned, there is no loss of earnings or profit but a loss of chance. This is the case with a lawyer who lets the time limit expire on a lawsuit that could have been won or lost. The courts usually award a percentage of what was at stake, according to the chances of success there were. For example, if 40.000 euros was at stake and the judge considers that there was a 50 % chance of winning, the compensation would be 20.000 euros. If the case was clearly lost, there may be no compensation.