Murdoch's Term of the Week: Mitigation of Damages

To continue on with our contract law theme, this week's TOTW explains the principles underpinning the concept that one must take steps to reduce one's exposure to losses in cases involving a breach of contract or a tortious wrong.


Mitigation of Damages

Diminution of loss. In general there is a duty on a person whose legal rights have been infringed to act reasonably to mitigate his loss. The injured party can recover no more than he would have recovered if he had acted reasonably, because any further damages do not reasonably follow from the defendant’s breach. Failure by a plaintiff to mitigate losses he incurred by the defendant’s action, may result in a reduction in the costs awarded to the plaintiff eg in a particular case only 19 days costs of a 22 day hearing were awarded to the plaintiff: Deane & Ors v VHI [1993 HC].

Damages are not restricted where the party harmed is unable to mitigate the losses due to impecuniosity: Doran v Delaney [1999 HC] 1 IR 303. See also Cullen v Horgan [1925] 2 IR 1; Bord Iascaigh Mhara v Scallan [1973] HC; Malone v Malone [1982] HC.

Where the injured party has received compensation from another source, the common law rule is that this compensation does not reduce damages to the defendant; however statute may require such a deduction. See Social Welfare Consolidation Act 2005 s.286; Civil Liability (Amendment) Act 1964 s.2.

In defamation (qv) actions, the following factors may be taken into account in mitigation of damages: an apology from the defendant: Defamation Act 1961 s.17 - Act now repealed; receipt by the plaintiff of compensation for the same or similar words already (ibid s.26); provocation by counter-defamations; and the bad reputation of the plaintiff. Where a defendant in such an action intends to give evidence in mitigation of damages, he must furnish particulars thereof to the plaintiff not later than seven days beforehand: RSC O.36 r.36.


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