Editing Damages (section)

== Compensatory damages{{anchor|Compensatory_or_expectation_damages}} ==
Compensatory damages are paid to compensate the claimant for loss, injury, or harm suffered by the claimant as a result of another's breach of duty that [[causation in English law|caused]] the loss.<ref>{{cite journal |last1=Bartels |first1=Natalia M. |last2=Madden |first2=M. Stuart |title=A Comparative Analysis of United States and Colombian Tort Law: Duty, Breach, and Damages |journal=Pace International Law Review |date=2001 |volume=13 |page=59 |doi=10.58948/2331-3536.1204 |s2cid=55140488 |url=https://heinonline.org/HOL/LandingPage?handle=hein.journals/pacinlwr13&div=7&id=&page= |access-date=6 July 2020|doi-access=free }}</ref> For example, compensatory damages may be awarded as the result of a negligence claim under tort law. [[Expectation damages]] are used in contract law to put an injured party in the position it would have occupied but for the breach.<ref>{{cite journal |last1=Cooter |first1=Robert |last2=Eisenberg |first2=Melvin A. |title=Damages for Breach of Contract |journal=California Law Review |date=1985 |volume=73 |issue=5 |page=1432 |doi=10.2307/3480408 |jstor=3480408 |url=https://heinonline.org/HOL/LandingPage?handle=hein.journals/calr73&div=51&id=&page= |access-date=6 July 2020}}</ref> Compensatory damages can be classified as special damages and general damages.<ref>{{cite journal |last1=Sanders |first1=Joseph |title=Reforming General Damages: A Good Tort Reform |journal=Roger Williams University Law Rev. |date=2008 |volume=13 |page=115 |url=https://heinonline.org/HOL/LandingPage?handle=hein.journals/rwulr13&div=9&id=&page= |access-date=6 July 2020}}</ref>

===Quantum (measure) of damages===
{{also|Measure of damages under English law}}
Liability for payment of an award of damages is established when the claimant proves, on the balance of probabilities, that a defendant's wrongful act caused a tangible, harm, loss or injury to the plaintiff. Once that threshold is met, the plaintiff is entitled to some amount of recovery for that loss or injury. No recovery is not an option. The court must then assess the amount of compensation attributable to the harmful acts of the defendant.<ref>See, e.g., the U.S. Supreme Court cases of {{cite web|title=The Conqueror, 166 US 110, 17 S. Ct. 510, 41 L. Ed. 937 (1897)|url=https://scholar.google.com/scholar_case?case=14810759345779336716|website=Google Scholar|access-date=19 September 2017}} and {{cite web|title=Palmer v. Connecticut Railway & Lighting Co., 311 US 544, 61 S. Ct. 379, 85 L. Ed. 336 (1941)|url=https://scholar.google.com/scholar_case?case=4887043836848493442|website=Google Scholar|access-date=19 September 2017}}</ref> The amount of damages a plaintiff would recover is usually measured on a "loss of bargain" basis, also known as expectation loss,<ref>airSlate Legal Forms, Inc. d/b/a USLegal, [https://definitions.uslegal.com/l/loss-of-bargain/ Loss of Bargain Law and Legal Definition], accessed 10 December 2022</ref> or "economic loss". This concept reflects the difference between "the value of what has been received and its value as represented".<ref>Supreme Court of Texas, [https://casetext.com/case/nobility-homes-of-texas-inc-v-shivers Nobility Homes of Texas Inc. v. Shivers], ''Casetext'', published 5 October 1977, accessed 10 December 2022</ref>

Damages are usually assessed at the date of the wrongful act, but in [[England and Wales]], Pelling J has observed that this is not the case if justice requires the assessment of damages to be calculated at some other date. In ''Murfin v Ford Campbell'', an agreement had been entered into whereby company shares were exchanged for [[loan note]]s, which could only be redeemed if certain profit thresholds had been achieved in the relevant accounting years. As the thresholds were not met, the loan notes were not redeemable, but at the date of the advisors' breach of contract this could not be known, only the loan notes' [[face value]] could be known. The conclusion was that in this case valuation could not be done until after the profit performance became known. In his judgement Pelling also referred to the case of ''[[Smith New Court Securities Ltd v Scrimgeour Vickers (Asset Management) Ltd]]'', a case where continuing [[misrepresentation]] affected the appropriate date for damages to be assessed.<ref>England and Wales High Court (Chancery Division), [https://www.bailii.org/ew/cases/EWHC/Ch/2011/1475.html Murfin v Campbell (2011) EWHC 1475 (Ch)], paragraphs 8, 12, delivered 22 June 2011, accessed 27 November 2022</ref>

===Special damages===
''Special damages'' compensate the claimant for the quantifiable monetary losses he has suffered.<ref>{{cite journal |last1=Cilia |first1=Fiona |title=Quantifying Damages for ''Lucrum Cessans'' in Tor |journal=[[Journal of Civil Law Studies]] |date=12 November 2010 |volume=4 |issue=2 |page=341 |url=https://digitalcommons.law.lsu.edu/jcls/vol4/iss2/8/}}</ref> 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, and so on.<ref>{{cite journal|last1=Morris|first1=Clarence|title=Liability for Pain and Suffering|journal=Columbia Law Review|date=March 1959|volume=59|issue=3|pages=476–485|jstor=1120125|doi=10.2307/1120125}}</ref> 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 [[mitigation (law)|mitigate]] damages)<ref>{{cite web|title=Duty to Mitigate|url=https://www.law.cornell.edu/wex/duty_to_mitigate|website=Wex|publisher=Cornell Law School|access-date=19 September 2017}}</ref> and consequential or economic losses resulting from lost profits in a business.

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.<ref>{{cite journal|last1=Goldberg|first1=John C.P.|title=Two Conceptions of Tort Damages: Fair v. Full Compensation|journal=DePaul Law Review|date=2005|volume=55|page=435|url=http://heinonline.org/HOL/LandingPage?handle=hein.journals/deplr55&div=20&id=&page=|access-date=19 September 2017}}</ref> 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 agrees to sell Mary an antique Rolex watch for £100. In fact the watch is a fake and worth only £50. If it had been a genuine antique Rolex, it would have been 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 her 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. (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 the contract would still be £450 (giving her the item she contracted to buy), however, in tort damages are £750.

====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 may include the lost profits that the claimant could have been expected to make in the period whilst the factory was closed and rebuilt.

====Breach of contract duty - (ex contract)====
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 damages|expectation measure]]" or "benefit-of-the-bargain" measure of damages). This rule, however, has attracted increasing scrutiny from Australian courts and legal commentators.<ref name="Tabcorp v Bowen Investments">{{cite AustLII|HCA|8|2009|litigants=Tabcorp Holdings Ltd v Bowen Investments Pty Ltd |courtname=auto }}.</ref><ref name="Clark v Macourt">{{cite AustLII|HCA|93|2013|litigants=Clark v Macourt |courtname=auto }}.</ref><ref>{{cite journal |first=David |last=Winterton |url=http://www.austlii.edu.au/au/journals/MelbULawRw/2014/27.html#fn4 |title=Clark v Macourt: Defective Sperm and Performance Substitutes in the High Court of Australia|journal=Melbourne University Law Review |year=2014 }} (2014) 38(2) Melbourne University Law Review 755.</ref> A judge arrives compensatory number by considering both the type of contract, and the loss incurred.<ref>{{Cite web|url=http://jec.unm.edu/education/online-training/contract-law-tutorial/remedies-for-breach-of-contract|title=Remedies for Breach of Contract — Judicial Education Center|website=jec.unm.edu|access-date=2020-04-13}}</ref>

When it is either not possible or not desirable to award the victim 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 damages (law)|reliance measure]]")<ref name="McRae v Commonwealth">{{cite AustLII|HCA|79|1951|litigants=[[McRae v Commonwealth Disposals Commission]] |parallelcite=[http://www.austlii.edu.au/au/cases/cth/HCA/1951/79.pdf (1951) 84 {{abbr|CLR|Commonwealth Law Reports}} 377] |courtname=auto }}.</ref><ref name="Commonwealth v Amann Aviation">{{cite AustLII|HCA|54|1991|litigants=[[Commonwealth v Amann Aviation]] |parallelcite=(1991) 174 [[Commonwealth Law Reports|CLR]] 64 |courtname=auto }}.</ref> 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]]).<ref name="Amev-Udc v Austin">{{cite AustLII|HCA|63|1986|litigants=Amev-Udc Finance Ltd v Austin |parallelcite=(1986) 162 [[Commonwealth Law Reports|CLR]] 170 |courtname=auto |date=4 November 1986}}.</ref> 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. To determine whether a clause is a liquidated damages clause or a penalty clause, it is necessary to consider:

{{Ordered list |list_style_type=lower-roman
|Whether the clause is 'extravagant, out of all proportion, exorbitant or unconscionable'<ref name="ACCC v Esanda">{{cite AustLII|FCA|1225|2003|litigants=Australian Competition & Consumer Commission v Esanda Finance Corporation Ltd |courtname=auto |date=7 November 2003}}.</ref>
|Whether there is a single sum stipulated for a number of different breaches, or individual sums for each breach<ref name="dunlop">{{cite BAILII|litigants=Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd |year=1915 |court=UKHL |num=1 |courtnaem=auto |date=26 April 1915 |parallelcite=[1915] [[Appeal Cases Law Reports|AC]] 847}}.</ref>
|Whether a genuine pre-estimate of damage is ascertainable<ref name="dunlop"/>}}

====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 [[Remoteness in English Law|remote]]. 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.

===General damages===
{{globalize|section|date=June 2016}}
''General damages'' are monetary compensation for the non-monetary aspects of the specific harm suffered. These damages are sometimes 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, impairment of mental or physical capacity, hedonic damages or loss of enjoyment of life, etc.<ref>{{cite web |url=http://d-w-s.co.uk/content/personal-injury-loss-amenity-compensation |location=Leicester |work=Douglas Wemyss Solicitors |title=Loss of Amenity |first=Richard |last=Beaman |date=2010-09-22 |url-status=dead |archive-url=https://web.archive.org/web/20101115095301/http://d-w-s.co.uk/content/personal-injury-loss-amenity-compensation |archive-date=2010-11-15 }}</ref> 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. In 2012 the [[Court of Appeal (England and Wales)|Court of Appeal of England and Wales]] noted that {{Blockquote|this court has not merely the power, but a positive duty, to monitor, and where appropriate to alter, the guideline rates for general damages in personal injury actions.<ref>[https://www.judiciary.uk/wp-content/uploads/JCO/Documents/Judgments/simmons-v-castle.pdf Simmons v. Castle], Case No: A3/2011/1846, paragraph 12, published 26 July 2012, accessed 17 July 2022</ref>}} General damages in England and Wales were increased by 10% for all cases where judgements were given after 1 April 2013, following changes to the options available to personal injury claimants wanting to cover the cost of their litigation.<ref>Herbert Smith Freehills LLP, [https://hsfnotes.com/litigation/jackson-reforms/10-increase-in-general-damages/ 10% Increase in General Damages], accesses 26 September 2022</ref>

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]].

====General damages in personal injury cases====
{{More citations needed|section|date=October 2010}}
The quantification of personal injury is not an exact science. In English law solicitors treat 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 [[Judicial College]]'s ''Guidelines for the Assessment of General Damages in Personal Injury Cases'' are adjusted following periodic review of the awards which have been made by the courts since the previous review.<ref>Lambert, J. (The Hon. Mrs Justice Lambert DBE), [https://www.judiciary.uk/wp-content/uploads/2022/07/DOC027-1-1.pdf Independent Inquiry into Child Sexual Abuse - Accountability and Reparations Investigation report: recommendations], letter to Alexandra Merity, Investigation Lawyer, [[Independent Inquiry into Child Sexual Abuse]], sent 7 February 2020, accessed 26 September 2022</ref>

The guidance which solicitors will take into account to help quantify general damages are:

;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.
;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 that specific judgment. 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 [http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWCA/Civ/2000/84.html Heil v Rankin]<ref>{{cite BAILII | litigants = Heil v Rankin & Another | court = EWCA | division = Civ | year = 2000 | num = 84 | courtname = [[Court of Appeal of England and Wales|Court of Appeal]] }}</ref> Generally speaking the greater the injury the greater the damages awarded.
;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.