Opinion of the Court

it is not, the factfinder under the Act must make a determination of disability that is “reasonable” and “in the interest of justice,” and one that takes account of the disability's future effects, $ 8(h).

In some cases a disparity between the worker's actual postinjury wages and his job-market capacity will be obvious, along with the reasons for it. If a disabled worker with some present capacity chooses not to work at all, or to work at less than his capacity, a windfall is avoided by determining present disability and awarding a benefit accordingly. See, e. g., Penrod Drilling Co. v. Johnson, 905 F. 2d 84, 87–88 (CA5 1990). At the other extreme, a worker with some present disability may nonetheless be fortunate enough to receive not merely the market wages appropriate for his diminished capacity, but full preinjury wages (say, because an employer is generous, for whatever reason). See, e. g., Travelers Ins. Co. v. McLellan, 288 F. 2d 250, 251 (CA2 1961); see also Edwards v. Director, OWCP, 999 F. 2d 1374, 1375–1376 (CA9 1993) (holding that wages from short-lived employment do not represent actual earning capacity on open market). Once again, the present disability may still be calculated and a corresponding award made.

A problem in applying the provisions applicable when there is a disparity between current wages and wageearning capacity arises in a case like this one, however. The worker now receives appropriate market wages as high or higher than those before his injury, thus experiencing no decline in present capacity. And yet (we assume for now) there is some particular likelihood that in the future the combination of injury and market conditions may leave him with a lower capacity. The question is whether such a person is presently disabled within the meaning of the statute, and if so, what provision should be made for the potential effects of disability in the future.

There are two reasons to treat such a person as presently disabled under the statute. The first follows from the provi

Opinion of the Court

sion of law that on its face bars an injured worker from waiting for adverse economic effects to occur in the future before bringing his disability claim, which generally must be filed within a year of injury. § 13(a), 33 U. S. C. $913(a); Pillsbury v. United Engineering Co., 342 U. S. 197 (1952). He is also barred from seeking a new, modified award after one year from the date of any denial or termination of benefits. § 22, 33 U. S. C. $ 922. Because an injured worker who has a basis to anticipate wage loss in the future resulting from a combination of his injury and job-market opportunities must nonetheless claim promptly, it is likely that Congress intended “disability” to include the injury-related potential for future wage loss. And because a losing claimant loses for all time after one year from the denial or termination of benefits, it is equally likely that Congress intended such a claimant to obtain some award of benefits in anticipation of the future potential loss.

2 A different conclusion might, perhaps, be drawn from our observation 46 years ago in Pillsbury, 342 U. S., at 198–199, that the agency allowed claims to be filed within one year of injury but before recovery for present disability could be had. If that practice were assumed to be authorized by the Act, an injured worker who anticipated future loss of earning capacity could file a claim within the 1-year period permitted by $ 13(a) yet defer litigation of the claim indefinitely until a capacity loss manifested itself, thereby undercutting our inference from the limitations provision that present disability must be conceived as including the potential for future decline in capacity. But it seems unlikely that when Congress enacted § 13(a) it intended workers to be able to file claims before they could establish all the elements entitling them to compensation. Moreover, while the practical effect of permitting protective filings and indefinitely deferring adjudication is in one respect the same as awarding nominal compensation when there is a significant possibility of future capacity loss, in that both approaches hold open the possibility of compensating a worker when the potential future economic effects of his injury actually appear, the former approach, unlike the latter, has the defect of putting off the adjudication of every element of the worker's claim, including such matters as the work-related nature of the injury, until long after the evidence grows stale. We therefore think that the inference we draw from the limitations provision is the better one.

Opinion of the Court

This conclusion is confirmed by the provision of $8(h) that in cases of disparity between actual wages and earning capacity, the natural effects of disability that will occur in the future must be given “due regard” as one of the “factors or circumstances in the case which may affect [a claimant's] capacity to earn wages in his disabled condition.” Although this mandate is phrased in general terms, its practical effect is limited to the class of cases at issue here, where the worker is presently able to earn at least as much as before his injury. In all other cases, when injury depresses the claimant's wage-earning capacity under the conditions prevailing at the time of an award, so that the present effects of his disability are unquestionably compensable immediately, the Act already makes provision for the future effects of disability by means of $22, which liberally permits modification of awards in response to changed conditions that occur within one year of the last payment of compensation (or a denial or termination of benefits). 33 U. S. C. $ 922. Rambo I held that this provision allows modification whenever a changed combination of training and economic (let alone physical) circumstances reduces, restores, or improves wage-earning capacity. 515 U. S., at 296–297.3 Since ongoing awards may be modified if future possibilities become present realities, there is no need to account for such possibilities in calculating a worker's immediately compensable disability; the Act plainly takes a wait-and-see approach to future contingencies here. The first award in this case was

3 As we noted in Rambo I, however, not every fluctuation in actual wages is a ground for modification, but only those shifts reflecting a change in the worker's underlying capacity, see 515 U. S., at 300-301, such as a change in physical condition, skill level, or the availability of suitable jobs. “There may be cases raising difficult questions as to what constitutes a change in wage-earning capacity, but we need not address them here." Ibid.

4 In liberally permitting modification, the Act resembles virtually all other workers' compensation schemes. See 3 A. Larson & L. Larson, Law of Workmen's Compensation $81.10, p. 15–1045 (1996). “[I]t is one of the main advantages of the reopening device (in workers' compensation schemes) that it permits a commission to make the best estimate of disability it can at the time of the original award, although at that moment it may be impossible to predict the extent of future disability, without having to worry about being forever bound by the first appraisal.” Id., $81.31(a), at 15-1127 to 15-1132 (footnotes omitted).

Opinion of the Court

a standard illustration of the proper practice of basing capacity determinations and compensation awards on present reality. If Rambo's initial award had already been discounted to reflect the odds of his obtaining less strenuous but higher paying work in the future, Rambo I could hardly have held that the Act permitted reduction of that initial award again when Rambo actually received training as a crane operator and found work using his new skills. The first award simply reflected the degree of diminished capacity operative at the time it was made, and it was proper to revise it when conditions changed.

Thus, if $ 8(h)'s admonition to consider future effects when calculating capacity has any practical application, it must be because it may apply in a case such as this one, in which there is no present wage loss and would thus be no present award if compensation were to be based solely on present employment conditions. If the future were ignored and compensation altogether denied whenever present earning capacity had not (yet) declined, $22 would bar modification in response to future changes in condition after one year.

The need for finality in workers' compensation awards is further reduced because compensation is paid periodically over the life of the disability, rather than in a lump sum, see $$ 14(a), (b), 33 U. S. C. $8914(a), (b) (providing for periodic payment of compensation). Thus, modifying a worker's compensation award generally affects future payments only, rather than retroactively adjusting a prior lump-sum payment. “Under the typical award in the form of periodic payments ..., the objectives of (workers' compensation) legislation are best accomplished if the commission can increase, decrease, revive, or terminate payments to correspond to a claimant's changed condition," subject, under most such laws, to certain time limitations. 3 Larson, Law of Workmen's Compensation $81.10, at 15–1045; id., $81.21, at 15–1046 to 15–1047.

Opinion of the Court

To implement the mandate of $8(h) in this class of cases, then, “disability” must be read broadly enough to cover loss of capacity not just as a product of the worker's injury and present market conditions, but as a potential product of injury and market opportunities in the future. There must, in other words, be a cognizable category of disability that is potentially substantial, but presently nominal in character.

There being, then, a need to account for potential future effects in a present determination of wage-earning capacity (and thus disability) when capacity does not immediately decline, the question is which of two basic methods to choose to do this. The first would be to make a one-time calculation of a periodic benefit following the approach of the common law of torts, which bases lump-sum awards for loss of future earnings on an estimate of “the difference ... between the value of the plaintiff's services as they will be in view of the harm and as they would have been had there been no harm.” Restatement (Second) of Torts $924, Comment d, p. 525 (1977). This predictive approach ordinarily requires consideration of every possible variable that could have an impact on ability to earn, including “[e]nvironmental factors such as the condition of the labor market, the chance of advancement or of being laid off, and the like.” 4 F. Harper, F. James, & 0. Gray, Law of Torts $ 25.8, pp. 550–551 (2d ed. 1986) (footnote omitted). Prediction of future employment may well be the most troublesome step in this wide-ranging enquiry. As the tripling of Rambo's own earnings shows, a claimant's future ability to earn wages will vary as greatly as opportunity varies, and any estimate of wage-earning potential turns in part on the probabilities over time that suitable jobs within certain ranges of pay will actually be open. In these calculations, there is room for error. Cf. id., $ 25.8, at 553

5 As a simplified example of the sort of calculation that would be required under this approach, a factfinder might decide in the present case that Rambo has a 75% chance of keeping work as a crane operator with

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