Not every injury resulting from a motor vehicle collision will leave someone unable to work. Oftentimes, an injured party can return to their employment and earn the same income they were earning pre-accident. However, returning to work does not mean you are as employable as you were before. This gap is where Loss of Competitive Advantage (LOCA) comes into play.
What Is LOCA?
In Mundinger v Ashton, 2019 ONSC 7161, the Ontario Superior Court of Justice explained the award for loss of competitive advantage is to be expressed as damages in recognition of the fact that an injured plaintiff may have been compromised in regards to their position in the open labour market as a result of the injuries suffered through the accident.
The theory is straightforward: someone with a physical or psychological impairment can typically do fewer jobs than they could before, and they’re at greater risk of being unable to keep the job they have now if anything changes — a layoff, a business closure, a need to switch employers. Their chances of growing and climbing within the labour market are diminished.
Think of a soccer coach who loses functioning in his leg. If the coach can still teach drills and organize the training from the sidelines, then their salary may not change today. However, their ability to compete for other coaching roles or to pivot into another job if this one is lost, is genuinely diminished. This diminished capacity holds value even where there is no present pay cut to point towards.
Evidence and the Threshold In Determining a Loss of Competitive Advantage Claim
The court in Ali v Irfan 2023 ONSC 3239, reaffirmed the essential elements comprising the concept of a loss of competitive advantage:
Some of the considerations in making an assessment for LOCA include:
- The plaintiff has been rendered less capable overall from earning income from all types of employment;
- The plaintiff is less marketable or attractive as an employee to potential employers;
- The plaintiff has lost the ability to take advantage of all job opportunities which might otherwise have been open to him, had he not been injured; and
- The plaintiff is less valuable to himself as a person capable of earning income in a competitive labour market
Loss of competitive advantage is a prospective loss. This means the plaintiff doesn’t need to prove they’ve already lost income — only that there’s a real and substantial possibility / an air of reality of a future loss, given the way their injuries have changed their standing in the labour market.
Whether a plaintiff has suffered a loss of competitive advantage is a factual question, and it’s the jury’s job to decide it. Juries aren’t held to a precise formula — they can take a broader, common-sense view of the evidence in front of them. In this case (Ali v Irfan), there was no medical evidence at all, only the plaintiff’s own testimony, backed up by her father’s. That was still enough to get the claim to the jury: the judge’s job isn’t to weigh whether the evidence is convincing, only to decide whether a jury could reasonably find a loss of competitive advantage if it believed what it heard. The court made clear that missing expert evidence doesn’t automatically sink a LOCA claim, and in the end, the plaintiff cleared the bar — she showed a real and substantial possibility of future loss through evidentiary testimony.
That said, a LOCA claim doesn’t survive on sympathy or intuition alone. In Mundinger v Ashton, 2019 ONSC 7161, the same court that supplied the definition of loss of competitive advantage also refused to let the claim go to the jury at all — not because the plaintiff wasn’t injured, but because her evidence didn’t separate the loss of competitive advantage from her ordinary future income loss claim. The two cases together point to the same underlying rule: the evidence doesn’t need to be expert evidence, but it does need to speak specifically to how the injury has changed the plaintiff’s standing in the labour market, not just to the fact that they were hurt.
How Loss of Competitive Advantage Fits Into Your Claim
In a motor vehicle tort claim, LOCA is typically pursued as part of the broader head of damages for diminished earning capacity or future income loss, alongside — not instead of — claims for pain and suffering, past income loss, and future care costs. It’s a way of capturing a loss that a strict wage-loss calculation would otherwise miss entirely: the plaintiff who’s still earning the same paycheque today but is objectively worse off in the job market than they were before the accident.
If you’ve been injured and are concerned about how the accident has affected your ability to work now or in the future — contact HSK Law. We represent injured clients across Ontario and the Greater Toronto Area, and we can help assess whether a loss of competitive advantage claim applies to your situation.
Sources:
https://www.canlii.org/en/on/onsc/doc/2019/2019onsc7161/2019onsc7161.html
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