Calculation of lost wages

In the case where the car accident victim was dead or left with residual disability, their left family or themselves have a legal right to claim their lost wages as compensation to the at-fault party. Getting the lost wages at once means getting the total amount of money which the victim would get it divided in the future if he was not dead. According to the Japanese Law and custom it's necessary to calculate the lost wages based on your actual wages, and also necessary to deduct interim interests from the calculated amount. In traffic accident cases in Japan, we use Leibniz Coefficient in calculation of interim interests. In this article, we take a closer look at how to calculate the lost wages and how to use Leibniz Coefficient.

Lost wages

Why is it necessary to deduct interim interests?

We raise one typical example. Let’s think a 13 years old boy was hit by a car and he unfortunately died. In this case, according to the past precedents, the Japanese court thinks he would work from 18 years old to 67 years old which is for 49 years. So his left family has a legal right to claim his lost wages for 49 years. If being more specific, they should deduct the dead boy’s living cost for 49 years from the total amount. Aside from the living cost, interim interests should be also deducted. For example, If you save one million dollars in your bank account for 10 years, you will get interests for 10 years. Money makes profit as time goes. So, if you get the dead family member’s lost wages now, interim should be deducted so that you cannot gain profit. For the  calculation of the interim interests, Leibnitz coefficient is used in car accident cases in Japan.   

How to calculate lost wages?

Let’s calculate the above dead boy’s lost wages.

-Point1: Actual wage or Average wage

The victim’s actual wage is referred to when calculating lost wages. So, if you are a foreigner, your real wages in your country are used for the calculation. When the victim doesn’t work, for example, they are children, students, or housewives, the average wages for all the ages are generally used for the calculation. However, in this case, it’s necessary to prove the victim has enough possibility to get the average wages in the future if they had no problem with working.

Getting back to the dead boy, he was not in working-age when he was dead. So, we have to use the average wages list. Tokyo district court uses the average wage of all the industry, gender, ages, and education when it comes to the calculation of lost wages of kids.

Ages

Wages (Unit: JPY1,000)

All ages

4892.3

~19

2381.5

20~24

3060.9

According to the table above, JPY4,892,300 is his lost wages per year. From this amount, we should deduct his living cost, which is generally 50% of the wage one year.
4,892,300*50%
So, his lost wages per year will be 2,446,150. We can obtain the lost wages for 49 years by multiplying the Leibnitz coefficient below.

-Point 2: Leibnitz coefficient

As we explained in the above, the interim interest should be deducted from the total amount of lost wages. The Leibnitz coefficient is a number used to deduct it in car accident cases in Japan. The following table shows the Leibnitz coefficients corresponding to the available working periods.

Year

Leibnitz coefficient

Year

Leibnitz coefficient

Year

Leibnitz coefficient

1

0.9524

31

15.5928

61

18.9803

2

1.8594

32

15.8027

62

19.0288

3

2.7232

33

16.0025

63

19.0751

4

3.5460

34

16.1929

64

19.1191

5

4.3295

35

16.3742

65

19.1611

6

5.0757

36

16.5469

66

19.2010

7

5.7864

37

16.7113

67

19.2391

8

6.4632

38

16.8679

68

19.2753

9

7.1078

39

17.0170

69

19.3098

10

7.7217

40

17.1591

70

19.3427

11

8.3064

41

17.2944

71

19.3740

12

8.8633

42

17.4232

72

19.4038

13

9.3936

43

17.5459

73

19.4322

14

9.8986

44

17.6628

74

19.4592

15

10.3797

45

17.7741

75

19.4850

16

10.8378

46

17.8801

76

19.5095

17

11.2741

47

17.9810

77

19.5329

18

11.6896

48

18.0772

78

19.5551

19

12.0853

49

18.1687

79

19.5763

20

12.4622

50

18.2559

80

19.5965

21

12.8212

51

18.3390

81

19.6157

22

13.1630

52

18.4181

82

19.6340

23

13.4886

53

18.4934

83

19.6514

24

13.7986

54

18.5651

84

19.6680

25

14.0939

55

18.6335

85

19.6838

26

14.3752

56

18.6985

86

19.6989

27

14.6430

57

18.7605

87

19.7132

28

14.8981

58

18.8195

88

19.7269

Le.29

15.1411

59

18.8758

89

19.7399

30

15.3725

60

18.9293

90

19.7523

The boy's potential working period was 49 years, so let's find the number of 49 in the table. Since 18.1687 is the Leibnitz coefficient number for 49 years of the working period, multiply the number with his lost wages per year.

2,446,150*18.1687=44,443,365

So his lost wages is total of JPY44,443,365. So his left family can have a legal right to claim the amount as his lost wages.

 
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