Law of Torts
Mitigation, Collateral Benefits, Interest and Betterment: What Reduces an Award and What Does Not
Three doctrines limit what a plaintiff actually recovers. Mitigation requires him to act reasonably to reduce his loss, and denies him the part he could have avoided. Remoteness excludes loss of a kind that was not reasonably foreseeable. And the collateral benefits rule decides which receipts from other sources are to be set off against the damages, to which the answer is: remarkably few. A plaintiff who insured himself, who was helped by his family, or who received charity keeps all of it, because none of those benefits was provided for the wrongdoer's relief.
The duty to mitigate, collateral benefits deducted and not deducted, remoteness, interest and betterment
1. The Duty to Mitigate
- It is not a duty in the strict sense. The plaintiff commits no wrong by failing to mitigate and can be sued by nobody for it. He simply cannot recover the part of his loss that he could reasonably have avoided.
- He must take reasonable steps, and the standard is not a high one. A plaintiff placed in difficulty by the defendant's wrong is not held to a counsel of perfection, and the defendant, having created the situation, is in a weak position to criticise the plaintiff's response to it.
- The burden of proving a failure to mitigate lies on the defendant. The plaintiff need not prove that he acted reasonably; the defendant must prove that he did not.
What mitigation requires | What it does not require |
Seeking reasonable medical treatment | Undergoing a treatment that carries a real risk, or one the plaintiff reasonably fears |
Seeking alternative employment within his capacity | Accepting employment beneath his station or beyond his capacity |
Repairing damaged property within a reasonable time rather than letting the damage worsen | Spending money the plaintiff does not have, where his impecuniosity was not of his own making |
Accepting a reasonable offer of substitute performance | Accepting an offer from the wrongdoer on terms that require him to abandon his claim |
Taking ordinary steps to limit a continuing loss | Taking steps that would damage his commercial reputation or his standing |
2. The Expenses of Mitigation
- Reasonable expenses incurred in an attempt to mitigate are recoverable, being a consequence of the tort.
- They are recoverable even if the attempt failed, or made matters worse, provided the attempt was reasonable when it was made. A plaintiff who tries in good faith to limit his loss is not penalised because the effort was unsuccessful.
- Conversely, where mitigation has reduced the loss below what it would have been, the benefit accrues to the defendant. The plaintiff recovers his actual loss, and a successful mitigation reduces the award.
- That is why the rule is sometimes said to cut both ways: the plaintiff bears the consequences of an unreasonable failure to mitigate, and the defendant takes the benefit of a successful one.
3. Collateral Benefits
Not deducted | Why |
Insurance moneys received under a policy the plaintiff paid for | He bought the cover and paid the premiums, and the wrongdoer is not to profit by the plaintiff's prudence. The insurer's remedy is subrogation against the wrongdoer |
Charitable payments and gifts, including from a public subscription | They were given for the benefit of the plaintiff and not for the relief of the wrongdoer, and a contrary rule would discourage generosity |
A pension earned by the plaintiff's own service | It is the fruit of his employment, in the nature of deferred pay, and not a benefit conferred by the defendant |
Gratuitous services rendered by family members | They are valued and awarded, not treated as free. The plaintiff ordinarily holds the sum for the person who rendered them |
Deducted | Why |
Sums received from the defendant himself, or from a person liable for the same wrong | Otherwise the plaintiff recovers twice for one loss |
Statutory no fault compensation for the same accident, such as the section 164 amount under the Motor Vehicles Act, 1988 | The statute expressly provides for adjustment, the sum being an advance and not an additional entitlement |
Wages actually paid by an employer during the period of incapacity | Unless they were a loan or a gift, the plaintiff has suffered no loss of earnings for that period |
Anything producing double recovery for the same head of loss | The general principle from which the particular rules follow |
4. Remoteness as a Limit on the Measure
- The defendant answers only for damage of a kind that was reasonably foreseeable: Overseas Tankship (UK) Ltd. v. Morts Dock and Engineering Co. Ltd., The Wagon Mound (No. 1) [1961] AC 388.
- Once the kind of damage is foreseeable, its extent need not be. That is the egg shell skull rule: the wrongdoer takes his victim as he finds him, and a defendant who foreseeably causes a minor injury answers for the major consequences that follow from the plaintiff's unusual susceptibility.
- Two torts depart from the foreseeability limit. In deceit the defendant answers for all loss flowing directly from the transaction, whether foreseeable or not. And under M.C. Mehta the compensation is correlated to the magnitude and capacity of the enterprise, which is not a measure of the plaintiff's loss at all.
- Remoteness is a limit on what may be recovered and not a rule of assessment, and it is examined fully in TORT 025.
5. Interest
- Interest is awarded on the damages, ordinarily from the date of the suit or the claim petition to the date of payment.
- Section 34 of the Code of Civil Procedure, 1908 governs in a suit, allowing interest on the principal sum adjudged from the date of the suit to the date of the decree, and further interest on the aggregate from the date of the decree to the date of payment.
- A tribunal commonly directs payment within a fixed period with a higher rate of interest on default, which is a practical device for securing prompt satisfaction of an award.
- Its function is to compensate for the delay in receiving money that was due, and not to penalise the defendant for contesting the claim.
- Interest is not ordinarily awarded on non pecuniary damages for the period before the award, since the sum was not quantified until the court fixed it, though Indian practice is not uniform on this.
6. Betterment and Restitutionary Damages
- Betterment arises where repairing damaged property has left the plaintiff with something better than he had. New parts for old in a vehicle; a new roof replacing a worn one; modern equipment replacing obsolete.
- An allowance may be made, since otherwise the plaintiff is better off than before the tort and restitutio in integrum has been exceeded.
- But the courts are cautious. A plaintiff forced to replace what he would not otherwise have replaced has not chosen the benefit, may not want it, and cannot realise it without selling the thing. An over generous deduction makes him pay part of the cost of the defendant's wrong.
- Restitutionary damages are measured by the defendant's gain rather than by the plaintiff's loss, and are exceptional rather than a general remedy in tort.
- They appear where the defendant used the plaintiff's property and the plaintiff suffered no loss, as where goods were wrongfully detained and used. A reasonable hire or user charge may then be awarded, though the plaintiff would not have hired them out.
- The idea overlaps the second Rookes category, which achieves a similar result by punishment rather than by restitution: TORT 093.
⚠ Why insurance is not deducted, and what follows from it The rule that insurance moneys are not deducted looks at first like a windfall: the plaintiff recovers his loss twice, once from his insurer and once from the wrongdoer. The appearance is misleading, and the reason matters. The plaintiff bought the cover and paid the premiums, year after year, precisely against the possibility of such a loss. If the benefit of that purchase were credited to the wrongdoer, the practical effect would be that a careful person who insures confers a free benefit on whoever happens to injure him, while a careless person who does not insure recovers in full. The law declines that result, and it avoids the double recovery by a different route: subrogation. The insurer who has paid steps into the plaintiff's shoes and pursues the wrongdoer in his name, so that the loss ends where it should, on the person who caused it, and the plaintiff is compensated once. The same reasoning explains the treatment of charitable gifts and of family services, and once it is seen the collateral benefits rules cease to look arbitrary. |
7. The Position Stated Shortly
1. The duty to mitigate is not a duty in the strict sense: the plaintiff simply cannot recover the part of his loss he could reasonably have avoided.
2. The standard is not high, and the burden of proving a failure to mitigate lies on the defendant.
3. Reasonable expenses of an attempt to mitigate are recoverable even if the attempt failed, and a successful mitigation reduces the award.
4. Insurance moneys under a policy the plaintiff paid for are not deducted, the insurer's remedy being subrogation.
5. Charitable payments, a pension earned by the plaintiff's own service, and gratuitous family services are not deducted either.
6. Sums received from the defendant, statutory no fault compensation for the same accident, and wages actually paid by the employer are deducted.
7. The defendant answers only for damage of a foreseeable kind, but once the kind is foreseeable the extent need not be: the egg shell skull rule.
8. Deceit and the M.C. Mehta rule depart from the foreseeability limit.
9. Interest is awarded from the date of the suit or claim petition, under section 34 of the Code of Civil Procedure, 1908 in a suit.
10. Betterment may be deducted where repair has left the plaintiff better off, though cautiously, and restitutionary damages measured by the defendant's gain are exceptional.