RTA loss of earnings newly self employed

Bmwm3gt2

Hi,

My partner has recently (5 months ago) started her own chauffeur business. Last week she was involved in a pile up on the motorway, she was not at fault as she was stationary when hit from behind.

The bit that I don't get is that her solicitor has told her they will take a daily average of her earnings to date to work out an average daily wage. This seems totally unfair and surely can't be correct as when she started she obviously had no client base and thus was operating at a loss while drumming up business, now however she does have quite a good client base. She is just after what she lost out on. Most of the bookings she was unable to do she has emails as proof and the phone bookings she can get in writing that they were bookings she has lost out on.

Would the court do as the solicitor stated or award it based on the documented work, less tax and expenses such as fuel and servicing? This to me seems the only fair way to work it out.

Many thanks Chris

Quentin

Your solicitor has advised you correctly.

Is hiring a possibility? That would be a reclaimable uninsured loss.

Bmwm3gt2

Quentin wrote: »

Your solicitor has advised you correctly.

Is hiring a possibility? That would be a reclaimable uninsured loss.

Thanks for your quick reply. She now has a hire vehicle she can use for work but it is the week she was without a car that she is worried about as she did have nearly £1000 of bookings for that week, she did have a client on board when the accident happened.

vaio

I'd say your solicitor is wrong..........

Taking an average over the last tax year etc gives an easy fair result for established businesses but if you have documented losses over the specific period then you should get them subject to the normal duty to mitigate.

Hintza

Why didn't she hire a car straight away? It could be argued she didn't mitigate her losses, by having a plan in place for such emergencies.

Bmwm3gt2

vaio wrote: »

I'd say your solicitor is wrong..........

Taking an average over the last tax year etc gives an easy fair result for established businesses but if you have documented losses over the specific period then you should get them subject to the normal duty to mitigate.

That is exactly how I think it should be done!

Bmwm3gt2

Hintza wrote: »

Why didn't she hire a car straight away? It could be argued she didn't mitigate her losses, by having a plan in place for such emergencies.

It was the earliest slot the council had to test the car to allow it to be used for reward, she did try to get it done as soon as possible.

BertTheRaccoon

I agree that average earnings may give a distorted (low) calculation here.

Bottom line is your partner can claim for net lost profit, so the following info will be needed

1- Evidence of the bookings she was unable to honour and what the gross charge for each job was going to be. (copy of her diary & any correspondence confirming the bookings)

2- Some evidence of what her operational costs are such as fuel, insurance, maintenance, Tax & NI liabilities etc etc.

1 - 2 = NET Lost profit

Bmwm3gt2

BertTheRaccoon wrote: »

I agree that average earnings may give a distorted (low) calculation here.

Bottom line is your partner can claim for net lost profit, so the following info will be needed

1- Evidence of the bookings she was unable to honour and what the gross charge for each job was going to be. (copy of her diary & any correspondence confirming the bookings)

2- Some evidence of what her operational costs are such as fuel, insurance, maintenance, Tax & NI liabilities etc etc.

1 - 2 = NET Lost profit

Thank you so much, the only part of that I would say shouldn't be deducted is the insurance as she is still paying that? She won't get a prorata reduction in her premium will she? I could be wrong!

BertTheRaccoon

All fixed & variable expenses need to be offset, her insurance costs, whether paid monthly or annually can still be broken down into a weekly expense.

Bmwm3gt2

BertTheRaccoon wrote: »

All fixed & variable expenses need to be offset, her insurance costs, whether paid monthly or annually can still be broken down into a weekly expense.

Sure but what I mean, rightly or wrongly, is that she did not have to pay the fuel or maintenance for the period she was carless but she still had to pay the insurance for the whole period? Thanks