Consequential Loss in UK Law

In contract, the damages are limited to what may reasonably be supposed to have been in this contemplation of the parties. The defendant is bound to make reparation for all the actual damages directly flowing from the fraudulent inducement. All such damages can be recovered: and it does not lie in the mouth of the fraudulent person to say that they could not reasonably have been foreseen.

If, in consequence of the injuries sustained, the plaintiff has enjoyed receipts to which he would not otherwise have been entitled, prima facie, those receipts are to be set against the aggregate of the plaintiff's losses and expenses in arriving at the measure of his damages.

Other forms of consequential loss are not capable of similarly precise calculation because they involve the attempted measurement of things which would or might have happened (or might not have happened) but for the defendant's wrongful conduct, as distinct from things which have happened. In such a situation the law does not require a claimant to perform the impossible, nor does it apply the balance of probability test to the measurement of the loss.

The claimant has first to establish an actionable head of loss. Where that involves a hypothetical exercise, the court does not apply the same balance of probability approach as it would to the proof of past facts. Rather, it estimates the loss by making the best attempt it can to evaluate the chances, great or small (unless those chances amount to no more than remote speculation), taking all significant factors into account.

Mrs. Dimond was at the time of the accident the owner and person in possession of her car. However even where the chattel is non profit earning (as was Mrs. Dimond's car) there may still be scope for awarding general damages for loss of use: The Mediana [1900] A.C. 113; Admiralty Commissioners v. S.S. Chekiang [1926] A.C. 637; Admiralty Commissioners v. Susquehanna [1926] A.C. 655.

First, if the loss is the disappointment at there not being provided what was contracted for, it seems to me difficult to measure that loss by consideration of the cost of repair. Fourthly, the "loss" constituted by a breach of contract has usually been recognised as calling for an award of nominal damages, not substantial damages.

The fundamental object of an award of damages in respect of this tort, as with all wrongs, is to award just compensation for loss suffered. This is the general rule, because generally this measure represents the amount of the basic loss suffered by the plaintiff owner. Depending on the circumstances some other measure, yielding a higher or lower amount, may be appropriate. The plaintiff may have suffered additional damage consequential on the loss of his goods.