damages
pl. n. A sum of money awarded by a court as compensation for a tort or a breach of contract. Damages are usually a lump-sum award (see also provisional damages). The general principle is that the claimant is entitled to full compensation (restitutio in integrum) for his losses. Substantial damages are given when actual damage has been caused, but nominal damages may be given for breach of contract and for some torts (such as trespass) in which no damage has been caused, in order to vindicate the claimant’s rights. Damages may be aggravated by the circumstances of the wrong. In exceptional cases in tort (but never in contract) exemplary damages may be given to punish the defendant’s wrongdoing. Damages may be classified as unliquidated or liquidated. Liquidated damages are a sum fixed in advance by the parties to a contract as the amount to be paid in the event of a breach. They are recoverable provided that the sum fixed was a fair pre-estimate of the likely consequences of a breach, but not if they were imposed as a penalty. Unliquidated damages are damages the amount of which is fixed by the court. Damages may also be classified as general and special damages.

The purpose of damages in tort is to put the claimant in the position he would have been in if the tort had not been committed. Recovery is limited by the rules of remoteness of damage (Overseas Tankship (UK) v Morts Dock & Engineering Co. (The Wagon Mound) [1961] AC 388 (PC)). The claimant must take reasonable steps to mitigate his losses and so may be expected to undergo medical treatment for his injuries or to seek alternative employment if his injuries prevent him from doing his former job. Damages may also be reduced for the claimant’s contributory negligence. The purpose of damages in contract is to put the claimant in the position he would have been in if the contract had been performed, but, as in the case of damages in tort, recovery is limited by rules relating to remoteness of damage (Hadley v Baxendale (1854) LR 9 Exch 341, 156 ER 145). Again as in the case of torts, the claimant is also under a duty to take all reasonable steps to mitigate his losses and cannot claim compensation for any loss caused by his failure to do this. If, for example, a hotel reservation is cancelled, the hotelier must make all reasonable attempts to relet the room for the period in question or as much of it as possible. See also gain-based damages.

Damages for breach of the Human Rights Act 1998 follow the principles of just satisfaction developed by the European Court of Human Rights (R (Greenfield) v Secretary of State for the Home Department [2005] UKHL 14, [2005] 1 WLR 673).

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