The aim of damages is to compensate you for your loss. It is generally the case that if another party, as a result of their wrong, damages your property you should be entitled, by way of compensation, to receive a sum equivalent to the loss in value of the asset in question. While this appears straightforward enough, a recent High Court decision suggests that the position is far from straight forward.
By way of a simple example: if I negligently damage your car, you are entitled to recover from me the amount by which your car has been devalued as a result of the damage which I caused. It is often the case that the easiest way to assess the loss in value is to ascertain the cost that you incurred in repairing the damage to your car. That is all well and good if you went to your local reputable garage and had the car repaired. The cost of repair can be easily proved and that is in general terms the equivalent loss in value.
But what if, for some reason you decide not to have your car repaired and continue to drive it, dent and all? Are you not entitled to any compensation?
Or what if your brother-in-law, who loves repairing cars, offers to repair it at cost? Do you simply recover the cost of the materials used to repair the car?
Or what if 2 days later and before you have a chance to have the damage which I caused repaired, you are involved in a subsequent accident and the car is written off and you have to buy a new car? Am I not liable to you for any damages at all?
The Court’s decision in Coles and others v Hetherton and Others provides answers to these questions:
- You are under no obligation to have the damaged car repaired;
- Even if you choose not to have the damaged car repaired, you can still recover the cost that you would have incurred had you gone out to your local reputable garage and had the car repaired;
- Further if you do not have the chance to have the car repaired because some supervening event destroys the car, before you have had a chance to have the car repaired (e.g. the second crash which results in the car being a write off), you can still recover the cost that you would have incurred had he gone out and had the car repaired;
- In both cases I cannot argue that as you did not spend any money having the damaged I caused repaired, I did not cause you any loss.
- Further in the case of the write off, I cannot argue that you would have had to buy a new car in any event and that the damage I caused did not cause you to have to incur the cost of buying a new car.
- In the case of your brother in-law repairing the car for next to nothing, the amount you actually paid your brother-in law will not act as a cap on your damages. You will be entitled to recover the cost that you would have reasonably incurred if you had the car repaired by a reputable local garage. While perhaps surprising at first sight, the court did not believe that you were profiteering (something which the Court will not allow).
Some may question whether the court’s approach in this case is consistent with the compensatory aim of damages. Indeed, the decision may well be the subject of an appeal. However if you remember that the aim is to compensate you for the loss in value to the damaged asset concerned, it all seems a bit more logical.
For more information contact James Levy or your usual Lewis Silkin contact.