It is the purpose of damages to restore the innocent party to the same position as if the loss had never been sustained, insofar as money can do this.1 The claimant is sometimes said to be under a duty to mitigate further losses, so that avoidable losses should be avoided or, if they are not avoided, will not be reflected in any award of compensation.2 But what about the situation where a loss is in fact avoided notwithstanding that there was no duty to mitigate in respect of it? Or, to put it another way, what happens when a loss has been avoided, notwithstanding that it was not an “avoidable” loss? The aim of damages is to compensate loss; therefore an award of damages must be reduced by the extent to which the loss has been avoided.3 However, the avoided loss principle is not as simple as it first appears. In the relevant chapter of McGregor on Damages, the author notes that “[t]he matter is not well worked out in the authorities and all that can be done is to sketch what the law probably is”.4 The Court of Appeal has grasped this nettle in deciding five conjoined appeals in Burdis v. Livsey, 5 making a bold attempt to elicit from the authorities principles of general application.

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