Reimbursement of black income

Reimbursement of black income

Photo: Mr. Sanne M. ten Hoove. Sanne ten Hoove is a Letselschade jurist at Randstad Personenschade in Rotterdam and wrote this blog about the so-called reimbursement of black income.

Do income that has not been taxed (so-called black income) qualify for compensation in personal injury cases? The discussion about this has been hotly debated lately. The District Court of Gelderland recently made a ruling on this issue.

The District Court of Gelderland ruled on December 16, 2020 in a partial settlement procedure that black income qualifies as property damage and should therefore be compensated.

In this case, the victim was cycling past a parked car in October 2014. At that moment, the driver of the car opened the door, causing the victim to fall. Due to the injuries she sustained, the victim could no longer perform her black work as a caregiver and therefore lost her income. She claimed this from the insurer, who then refused to compensate it as loss of earning capacity.

The insurer argued that the possible loss of black income cannot be considered compensable damage. The court clearly disagreed. According to the court, the victim must be put back in the position she would have been in if the accident had not happened to her.

Although the victim in this case was unable to prove that she had black income, this ruling is still of great importance for the personal injury practice. It is good news for victims who can now claim compensation for this damage item.

This ruling is at odds with an earlier ruling by the District Court of North Holland of January 16, 2020, which held a completely different view. In this ruling, the court ruled that a kicked-over kickboxing trainer was not entitled to compensation for his black income.

The District Court of North Holland found at the time that the victim had no legitimate interest in receiving compensation for this damage item. There would be a generally accepted starting point that damage to non-legitimate interests (evading taxes by earning black income) in principle does not qualify for compensation.

This ruling was welcomed by insurers. They refused to compensate black income as loss of earning capacity in personal injury cases anymore. The ruling of the District Court of Gelderland now throws a spanner in the works. Lawyer Onur Emre reacts enthusiastically:

“It is good for the practice that the partial settlement judge has confirmed with this recent ruling that black earnings are part of personal injury. This shuts the mouth of various insurance lawyers who believe that it is ‘socially’ not justified to pay out black earnings as personal injury. The partial settlement judge does not follow this.

It is a pity that the lawyer of a victim was not able to provide sufficient evidence of the black earnings, which is why the request was rejected. There would have been more in store for the victim if the substantiation had been fully and correctly provided to the partial settlement judge. Perhaps it will succeed after this ruling via a trial procedure.”

Incidentally, various lawyers, including from Spetter Advocaten, had already expected this. They pointed out that the ruling of the District Court of North Holland did not seem to be in line with earlier rulings. See:

Whether the discussion has been settled after the recent ruling remains to be seen. Proponents and opponents are still facing each other and new lawsuits are likely.

Insurers on the one hand argue that a society like the Netherlands attaches great importance to tax payments, that black work is prohibited by law, and that it is simply socially unacceptable to compensate for lost black income as damage. See, for example:

Victims and their advocates, on the other hand, argue that victims have a right to full compensation for their damage and that there is nothing wrong with much black work (for example, cleaning work). It actually meets a social need.

So it remains to be seen what the next ruling will be. To be continued.

Author Sanne ten Hoove

Published on 02-02-2021

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