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CHOICE, BENEFITS AND THE BASIS OF THE MARKET RULE

Lloyd's Maritime and Commercial Law Quarterly

CHOICE, BENEFITS AND THE BASIS OF THE MARKET RULE Andrew Dyson * The New Flamenco Introduction When must benefits received by the claimant be taken into account in the assessment of damages? Where the claimant would not have received the benefit “but-for” the breach, some would say that the answer is “always”, 1 and many more have suggested “nearly always”. 2 The compensatory principle aims to put the claimant in the same position as if the breach had not occurred. 3 To “ignore” (or treat as res inter alios acta ) benefits that would not have arisen but-for the breach would be to put the claimant in a better position than if the wrong had not occurred, so the argument goes. 4 On this widely held (but overly simplistic) view, the claimant can never recover more than its “actual loss” evident at the date of trial: “put shortly, the claimant cannot recover for an ‘avoided loss’”. 5 1. See eg David McLauchlan, “Expectation Damages: Avoided Loss, Offsetting Gains and Subsequent Events”, in D Saidov and R Cunnington (eds), Contract Damages: Domestic and International Perspectives (Hart, Oxford, 2008), 384. 2. See eg Andrew Burrows, Remedies for Torts and Breach of Contract , 3rd edn (OUP, 2004), 156–161; Andrew Tettenborn, The Law of Damages , 2nd edn (LexisNexis, 2010), [5.03]. 3. Robinson v Harman (1848) 1 Ex 850 (Ex); Livingstone v Rawyards Coal Co (1879) LR 5 App Cas 25 (HL). 4. See eg the reasoning of Lord Atkinson in Wertheim v Chicoutimi Pulp Co [1911] AC 301 (PC), 308. 5. Harvey McGregor, McGregor on Damages , 19th edn (Sweet & Maxwell, London, 2014) [9.006], often referred to as McGregor’s “third rule of mitigation”. See also Dimond v Lovell [2002] 1 AC 384 (HL) 406 (Lord Hobhouse of Woodborough). Case and comment 203

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