REMOTENESS OF DAMAGE

Transfield Shipping Inc v Mercator Shipping Inc [2008] UKHL 48; [2008] 3 WLR 345

The House of Lords in Transfield Shipping Inc v Mercator Shipping Inc [2008] UKHL 48; [2008] 3 WLR 345 re-considered the law relating to remoteness of damage in the law of contract. The case signals a narrower approach to the recovery of damages, although the precise ambit of the decision is unclear. It is, however, clear that it is no longer sufficient simply to show that the loss which has been suffered is a reasonably foreseeable consequence of the breach. In deciding whether or not the loss is recoverable, it may be important to ask whether or not the defendant accepted responsibility for the loss in respect of which the claim has been brought. The expectation of the market would also appear to be an important factor to take into account when deciding whether the defendant should be held responsible for the loss which has been suffered.