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The examples and perspective in this article deal primarily with common law and do not represent a worldwide view of the subject. Please improve this article and discuss the issue on the amages” title=”Talk amages”>talk page. (November 2010) |
In law, damages is an award of money to be paid to a person as compensation for loss or injury;[1] grammatically, it is a singular noun, not plural.
[edit] Compensatory damages
Compensatory damages, called actual damages, are paid to compensate the claimant for loss, injury, or harm suffered as a result of (see requirement of causation) another’s breach of duty.
[edit] Quantum/measure of damages
[edit] Breach of contract duty – (ex contractu)
On a breach of contract by a defendant, a court generally awards the
sum that would restore the injured party to the economic position they
expected from performance of the promise or promises (known as an “expectation measure” or “benefit-of-the-bargain” measure of damages).
When it is either not possible or not desirable to award sured in
that way, a court may award money damages designed to restore the
injured party to the economic position they occupied at the time the
contract was entered (known as the “reliance measure“), or designed to prevent the breaching party from being unjustly enriched (“restitution”) (see below).
Parties may contract for liquidated damages
to be paid upon a breach of the contract by one of the parties. Under
common law, a liquidated damages clause will not be enforced if the
purpose of the term is solely to punish a breach (in this case it is
termed penal damages).
The clause will be enforceable if it involves a genuine attempt to
quantify a loss in advance and is a good faith estimate of economic
loss. Courts have ruled as excessive and invalidated damages which the
parties contracted as liquidated, but which the court nonetheless found
to be penal.
[edit] Breach of tort duty – (ex delicto)
Damages in tort are generally awarded to place the claimant in the
position that would have been taken had the tort not taken place.
Damages in tort are quantified under two headings: general damages and special damages.
In personal injury claims, damages for compensation are quantified by
reference to the severity of the injuries sustained (see below general
damages for more details). In non-personal injury claims, for instance, a
claim for professional negligence against solicitors, the measure of
damages will be assessed by the loss suffered by the client due to the
negligent act or omission by the solicitor giving rise to the loss. The
loss must be reasonably foreseeable and not too remote.[2]
Financial losses are usually simple to quantify but in complex cases
which involve loss of pension entitlements and future loss projections,
the instructing solicitor will usually employ a specialist expert
actuary or accountant to assist with the quantification of the loss.
[edit] General damages
General damages, sometimes styled hedonic damages,
compensate the claimant for the non-monetary aspects of the specific
harm suffered. This is usually termed ‘pain, suffering and loss of
amenity’. Examples of this include physical or emotional pain and
suffering, loss of companionship, loss of consortium, disfigurement, loss of reputation, loss or impairment of mental or physical capacity, loss of enjoyment of life, etc.[3]
This is not easily quantifiable, and depends on the individual
circumstances of the claimant. Judges in the United Kingdom base the
award on damages awarded in similar previous cases.
General damages are generally awarded only in claims brought by
individuals, when they have suffered personal harm. Examples would be
personal injury (following the tort of negligence by the defendant), or
the tort of defamation.
[edit] Speculative damages
Speculative damages
are damages that have not yet occurred, but the plaintiff expects them
to. Typically, these damages cannot be recovered unless the plaintiff
can prove that they are reasonably likely to occur.[4]
[edit] Quantification of personal injury claims
The quantification of personal injury is not an exact science. In
English law solicitors like to call personal injury claims as “general
damages” for pain and suffering and loss of amenity (PSLA). Solicitors
quantify personal injury claims by reference to previous awards made by
the courts which are “similar” to the case in hand. The guidance
solicitors will take into account to help quantify general damages are
as hereunder:
1 The age of the client
The age of the client is important especially when dealing with fatal
accident claims or permanent injuries. The younger the injured victim
with a permanent injury the longer that person has to live with the
PSLA. As a consequence, the greater the compensation payment. In fatal
accident claims, generally the younger deceased, the greater the
dependency claim by the partner and children.
2 The nature and extent of the injuries sustained.
Solicitors will consider “like for like” injuries with the case in
hand and similar cases decided by the courts previously. These cases are
known as precedents. Generally speaking decisions from the higher
courts will bind the lower courts. Therefore, judgments from the House
of Lords and the Court of Appeal have greater authority than the lower
courts such as the High Court and the County Court. A compensation award
can only be right or wrong with reference to previous judgments.
Sometimes it is a matter of opinion of how much an injury claim is worth
and the skill of the solicitor is persuading the opponent and
ultimately the judge that their assessment is right.[citation needed]
Solicitors must be careful when looking at older cases when quantifying
a claim to ensure that the award is brought up to date and to take into
account the court of appeal case in Heil v Rankin [5] Generally speaking the greater the injury the greater the damages awarded.
A quick guide to assess personal injury claims is by reference to the Judicial Studies Board Guidelines for the Assessment of General Damages in Personal Injury Cases [1]. Some case examples can also be considered [2]
3 Gender of the client
Generally speaking damages for personal injury for males and females
are the same. However where there can be a difference weighted in favour
of females is where the injury results in permanent scarring to the
skin.[citation needed]
Where the scarring is clearly visible such as the face, legs, and arms,
females will usually obtain an greater amount of compensation than
males. The compensation reflects the general assumption that females
will be affected more than males by scarring and thus will be awarded
more. However each case will be decided on its own particular facts. For
instance a male model who sustains a scarring tissue to his face may
obtain just as much as a female.[citation needed]
4 Personal attributes and fortitude of the client
This heading is inextricably linked with the other points above.
Where two clients are of the same age, experience and suffer the same
injury, it does not necessarily mean that they will be affected the
same. We are all different. Some people will recover more quickly than
others. The courts will assess each claim on its own particular facts
and therefore if one claimant recovers more quickly than another, the
damages will be reflected accordingly. It is important to note here that
“psychological injuries” may also follow from an accident which may
increase the quantum of damages.
When a personal injury claim is settled either in court or out of
court, the most common way the compensation payment is made is by a lump
sum award in full and final settlement of the claim. Once accepted
there can be no further award for compensation at a later time unless
the claim is settled by provisional damages often found in industrial
injury claims such as asbestos related injuries.
[edit] Special damages
Special damages compensate the claimant for the quantifiable monetary losses suffered by the plaintiff.[citation needed]
For example, extra costs, repair or replacement of damaged property,
lost earnings (both historically and in the future), loss of
irreplaceable items, additional domestic costs, etc. They are seen in
both personal and commercial actions.
Special damages can include direct losses (such as amounts the claimant had to spend to try to mitigate[6]
problems) and consequential or economic losses resulting from lost
profits in a business. Special damages basically include the
compensatory and punitive damages for the tort committed in lieu of the
injury or harm to the plaintiff.
Damages in tort are awarded generally to place the claimant in the
position in which he would have been had the tort not taken place.
Damages for breach of contract are generally awarded to place the
claimant in the position in which he would have been had the contract
not been breached. This can often result in a different measure of
damages. In cases where it is possible to frame a claim in either
contract or tort, it is necessary to be aware of what gives the best
outcome.
If the transaction was a “good bargain” contract generally gives a better result for the claimant.
As an example, Neal sells Mary a watch for £100. Neal tells Mary it
is an antique Rolex. In fact it is a fake one and worth £50. If it had
been a genuine antique Rolex, it would be worth £500. Neal is in breach
of contract and could be sued. In contract, Mary is entitled to an item
worth £500, but she has only one worth £50. Her damages are £450. Neal
also induced Mary to enter into the contract through a misrepresentation
(a tort). If Mary sues in tort, she is entitled to damages that put
herself back to the same financial position place she would have been in
had the misrepresentation not been made. She would clearly not have
entered into the contract knowing the watch was fake, and is entitled to
her £100 back. Thus her damages in tort are £100. (However, she would
have to return the watch, or else her damages would be £50.)
If the transaction were a “bad bargain”, tort gives a better result
for the claimant. If in the above example Mary had overpaid, paying £750
for the watch, her damages in contract would still be £450 (giving him
the item he contracted to buy), however in tort damages are £700. This
is because damages in tort put her in the position she would have been
in had the tort not taken place, and are calculated as her money back
(£750) less the value of what she actually got (£50).
[edit] Various matters
[edit] Incidental and consequential losses
Special damages are sometimes divided into incidental damages, and consequential damages.
Incidental losses include the costs needed to remedy problems and put
things right. The largest element is likely to be the reinstatement of
property damage. Take for example a factory which was burnt down by the
negligence of a contractor. The claimant would be entitled to the direct
costs required to rebuild the factory and replace the damaged
machinery.
The claimant may also be entitled to any consequential losses. These
are the lost profits that the claimant could have been expected to make
in the period whilst the factory was closed and rebuilt.
[edit] Foreseeability and remoteness
Damages are likely to be limited to those reasonably foreseeable by
the defendant. If a defendant could not reasonably have foreseen that
someone might be hurt by their actions, there may be no liability. This
is known as remoteness.
This rule does not usually apply to intentional torts (e.g. deceit), and also has stunted applicability to the quantum in negligence where the maxim Intended consequences are never too remote applies – ‘never’ is inaccurate here but resorts to unforeseeable direct and natural consequences of an act.
[edit] Quantifying losses in practice – expert evidence
It may be useful for the lawyers for the plaintiff and/or the defendant to employ forensic accountants or forensic economists to give evidence on the value of the loss. In this case, they may be called upon to give opinion evidence as an expert witness.
[edit] Statutory damages
Statutory damages
are laid down in law. Mere violation of the law can entitle the victim
to a statutory award, even if no actual injury occurred. These are
similar to, but different from, nominal damages (see below) in which no
written sum is specified.
For example, the possible remedies for misrepresentation in the United Kingdom are codified in the Misrepresentations Act.
[edit] Nominal damages
On the other hand, nominal damages are very small damages awarded to
show that the loss or harm suffered was technical rather than actual.
Perhaps the most famous nominal damages award in modern times has been
the $1 verdict against the National Football League (NFL) in the 1986 antitrust suit prosecuted by the United States Football League. Although the verdict was automatically trebled pursuant to antitrust law in the United States,
the resulting $3 judgment was regarded as a victory for the NFL.
Historically, one of the best known nominal damage awards was the farthing that the jury awarded to James Whistler in his libel suit against John Ruskin. In the English jurisdiction, nominal damages are generally fixed at £2.
Many times a party that has been wronged but is not able to prove
significant damages will sue for nominal damages. This is particularly
common in cases involving alleged violations of constitutional rights,
such as freedom of speech.
[edit] Punitive damages (non-compensatory)
Generally, punitive damages, which are also termed exemplary damages in the United Kingdom,
are not awarded in order to compensate the plaintiff, but in order to
reform or deter the defendant and similar persons from pursuing a course
of action such as that which damaged the plaintiff. Punitive damages
are awarded only in special cases where conduct was egregiously
invidious and are over and above the amount of compensatory damages,
such as in the event of malice or intent. Great judicial restraint is expected to be exercised in their application. In the United States punitive damages awards are subject to the limitations imposed by the due process of law clauses of the Fifth and Fourteenth Amendments to the United States Constitution.
In England and Wales, exemplary damages are limited to the circumstances set out by Lord Patrick Devlin in the leading case of Rookes v. Barnard. They are:
- Oppressive, arbitrary or unconstitutional actions by the servants of government.
- Where the defendant’s conduct was ‘calculated’ to make a profit for himself.
- Where a statute expressly authorises the same.
Rookes v Barnard has been much criticised and has not been followed in Canada or Australia or by the Privy Council.
Punitive damages awarded in a US case would be difficult to get
recognition for in a European court, where punitive damages are most
likely to be considered to violate ordre public.[7][2]
[edit] Restitutionary or disgorgement damages
In certain areas of the law another head of damages has long been
available, whereby the defendant is made to give up the profits made
through the civil wrong in restitution.
Doyle and Wright define restitutionary damages as being a monetary
remedy that is measured according to the defendant’s gain rather than
the plaintiff’s loss.[8]
The plaintiff thereby gains damages which are not measured by reference
to any loss sustained. In some areas of the law this heading of damages
is uncontroversial; most particularly intellectual property rights and breach of fiduciary relationship.
In England and Wales the House of Lords case of Attorney-General v. Blake opened up the possibility of restitutionary damages for breach of contract. In this case the profits made by a defecting spy, George Blake,
for the publication of his book, were awarded to the British Government
for breach of contract. The case has been followed in English courts,
but the situations in which restitutionary damages will be available
remain unclear.
The basis for restitutionary damages is much debated, but is usually
seen as based on denying a wrongdoer any profit from his wrongdoing. The
really difficult question, and one which is currently unanswered,
relates to what wrongs should allow this remedy.
[edit] Legal costs
In addition to damages, the successful party is entitled to be
awarded his reasonable legal costs that he spent during the case. This
is the rule in most countries other than the United States. In the
United States, a party generally is not entitled to its attorneys’ fees or for hardships undergone during trial, although a few exceptions exist, such as discrimination.[9] See American rule.
[edit] History
Among the Saxons, a price called Weregeld was paid for homicide by the killer, in part to the family of the victim, in part to the local king.
[edit] See also
[edit] References
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