When a case handler is assessing financial losses in personal injury litigation, the starting point should always be to work out an amount that would put the claimant back into the position they would have been in if they had not been injured in the first place.
As a matter of law, claimants have to take reasonable steps to mitigate or reduce their loss. If they do not do this, the court may refuse to award compensation for the part of the loss that could have been avoided.
It is up to the defendant to prove that the claimant did not take reasonable steps to mitigate their loss. The claimant can, however, claim for the additional expenses incurred when attempting to minimise those losses.
An example to illustrate the issues that can arise regarding failure to mitigate is as follows:
A claimant is due to commence a lucrative fixed-term contract for work, but loses that contract when she is temporarily unable to drive after an accident. The amount to be claimed is the net earnings that would have been earned from the contract. However, the claimant should expect to be questioned closely on the following:
- Was she really completely unable to drive? Could she have attempted driving with breaks in the journey?
- Even if driving was impossible, could she have found an alternative way of managing the contract? For example, could she have used public transport, taken a taxi or delayed the start date of the contract?
- What attempts did she make to find alternative work when she was able to resume driving?
Common examples of failure to mitigate losses which have arisen in personal injury claims include:
- Failing to undergo medical treatment and, as a consequence, symptoms of an injury take longer to resolve than they would have done otherwise;
- Replacing a damaged item with a brand new one, rather than having it repaired;
- Not returning to work or full-time hours when able to do so.
There is a duty on claimants to keep their losses as low as reasonably possible. It may not be sufficient to simply show that a particular loss has arisen as a direct consequence of an accident.