Damages

DAMAGES, the sum of money claimed or adjudged to be paid in compensation for loss or injury inflicted by a wrongdoer. Compensation first appears in law as a substitute for retaliation. Primitive systems appear universally to have had detailed scales of compensation for each particular form of personal injury, like the irotvi, of the Iliad and the Anglo-Saxon wer-gild. Punishment and compensation were not distinguished. In modern systems criminal and civil remedies are clearly separated, although in France and many foreign countries they are often administered in the same proceeding. In countries following the common law and in Scotland, the proceedings, with few exceptions, are kept separate.

Assessment of Damages.

Courts of common law had no other remedy than damages, and consequently rules had to be evolved for assessing in money losses which often could not be so assessed with any degree of accuracy. Where, as in breaches of contract, the loss could be accurately estimated, the measure of damages was governed by strict rules; in other cases, the jury, or a judge, arbitrator or referee acting as a jury, was left to fix a reasonable sum in view of all the circumstances. In such cases, unless substantial injustice has been caused by the judge's mis direction or by the improper admission or rejection of evidence, a court of appeal will not interfere with the assessment if a jury could reasonably have so fixed the amount. The damages, how ever, must be assessed once and for all in one lump sum. If unexpected damage occurs after assessment, in the absence of a new cause of action, the plaintiff cannot obtain a reassessment, nor, if possibilities which do not in fact occur induce the jury to award heavy damages, can the defendant, when the event is as certained, have the assessment reduced. Thus in an action for per sonal injuries permanently incapacitating the plaintiff, the jury cannot award an annuity, but, with reasonable regard to the prob abilities, must award a sum which will stand unaltered whether the plaintiff survive for one year or for 20. If, however, the occur rence of future damage would constitute a new cause of action, damages are assessed up to the time when the assessment takes place, but no account is taken of future damage, however probable.

Courts of equity had, until 1858 (Cairn's Act), no jurisdiction to award damages, but could order specific performance of certain contracts and could interfere by injunction to prevent a threatened wrong. These powers were not exercised if the damages which could be obtained from a court of common law were an adequate remedy, but since 1858 courts of equity have been empowered to award damages, if they deem fit, in lieu of an injunction or a decree of specific performance. This power enables the court to award damages where the injury is only threatened (Leeds In dustrial Co-operative Society, Ltd., v. Slack, 1924, A.C. 851) . Apart from this special case, however, damages can only be awarded by any court when a legal wrong has already been com mitted. Trade competition, revelation of the true character of an impostor, the making of works authorized by statute and countless other acts may inflict serious injury, yet damages cannot be recovered. A cause of action must be proved. If a cause of action is proved, however, damages will be awarded. The amount will be nominal (from 4o shillings to one shilling or even a farthing) if no proof of actual injury is given; but the award is important as establishing a right and as a "peg on which to hang costs." Such nominal damages are to be distinguished from contemptuous damages, by awarding which the jury express their view that the plaintiff although alleging substantial injury, has not in fact suf fered any, and should not have brought an action. The award of contemptuous damages seldom occurs in practice except in actions for defamation and can only occur where there is no settled measure of damages. Such an award is a material fact for the judge to consider if he is asked to deprive a successful plaintiff of costs, but it is not a conclusive fact.

If a plaintiff is entitled to more than nominal damages, the object of the common law is to place him, so far as money can do so, in the same position as if the wrong had not occurred. But that principle does not entitle the plaintiff to compensation which flows from some other cause than the defendant's wrong. The damages must not be too remote; but the rules on remoteness of damage are complicated and the subject of much debate. At one time a single test was applied : Was the damage the natural and probable result of the wrong? But the test was of little value unless supplemented by a mass of case law. Of recent years judges have preferred to ask if the damage is the direct result of the wrong. If so, compensation is recoverable, however improb able was the result (In re Polemis, 1921, 3 K.B. 56o). But the question remains open when the test is applied, whether the de fendant's wrong was the true cause of the damage. Thus where a person entrusted with a libellous letter wrongfully left it where it was seen by others and the writer was thereupon successfully sued for libel, the damage which the writer thus suffered was held not to flow from the wrongful exposure of the letter, but from the writer's own libel (Weld-Blundell v. Stephens, 192o, A.C. 956). Similarly where a maintained action has. been successful, the damages and costs in which the defendant is condemned flow from his own wrong and cannot be recovered in an action for main tenance (Neville v. London Express Newspaper Ltd., 1919, A.C. 368). The intervention of another person's act between the wrong and the damage also prevents the damage from being the direct result of the wrong.

Contemplated Result.

Nevertheless, in many cases a wrong doer is responsible for damage, although the intervention of others has broken the direct chain of causation. If the wrongdoer actu ally contemplated or ought to have contemplated or was under a duty to guard against the particular kind of damage which fol lowed from his act, he is liable unless, as in the cases above cited, the plaintiff is seeking indemnity from his own wrong. Common illustrations are the republication, in pursuance of a legal or moral duty or by wrongdoer's authority, of defamatory words, and the instinctive acts of persons put in peril by the defendant's wrong. Thus in a famous case (Scott v. Shepherd, 1773, 2 W.B1. 892) the plaintiff, injured by the explosion of a lighted squib thrown from hand to hand, was entitled to recover in trespass from the original thrower as if he had directly thrown the squib into his eye. Similarly if a customer draws a cheque with blank spaces which facilitate forgery, he must bear the loss if his bank pays the amount as fraudulently altered (London Joint Stock Bank Ltd. v. Macmillan, 1918, A.C. 777). The intervening criminal act is an act against which the customer is bound to guard. More difficult questions arise when the intervening acts are of children. Persons who know of the presence or probable presence of children ought to contemplate their getting into mischief and their acts "in the wantonness of infancy" will be mere links in the chain of causa tion. But if the childish acts are such as would not reasonably be contemplated, the chain of causation will be broken (McDowall V. Great Western Ry. Co., 1903, 2 K.B. 331).

The same principles apply to breaches of contract. Very often damage follows a breach of contract, but the true cause is to be found in circumstances outside the contract. If so damages are only recoverable if the circumstances were or ought to have been in the contemplation of the parties. Mere knowledge is not enough : the circumstances must be in their contemplation as affecting their contractual obligations. In the leading case on the subject (Hadley v. Baxendale, 9 Ex. a carrier who negligently delayed a mill shaft sent for repair was held not re sponsible for the stoppage of the mill owing to there being no spare shaft. The commonest illustration, however, arises where in an action for default in delivering goods claim is made for loss of profit on a resale. If the default makes delivery under the con tract of resale impossible the loss of profit will be recoverable if, and only if, resale was in the contemplation of the parties. The same test determines the recovery of damages and costs payable to third parties.

Even when damages are not too remote they may, however, be irrecoverable because the plaintiff has neglected the duty which lies on him to act reasonably in order to mitigate his damages. If, after the cause of action has arisen, the plaintiff can reduce the loss by reasonable steps, he cannot recover compensation for any part of the damage which is due to his neglect to take such steps; and if from the steps he takes he derives a benefit which he would not have secured if the wrong had not been committed, such benefit will be considered in assessing the damages (British Westinghouse Ltd. v. Underground Rys. Ltd., 1912, A.C. 673).

Liquidated Damages.

In contracts it is not uncommon to specify the amount to be paid in the event of breach. If the amount, whatever the parties call it, is a penalty, the courts will ignore the provision. If, however, looking at all the circumstances, the court is of opinion that the parties made a genuine attempt to pre-estimate the loss which would result from breach, the amount will be liquidated damages and the court, without independent assessment, will award such amount to the party wronged. Or dinarily he can recover no greater damages ; but if he is able to show special damage flowing from circumstances which were entirely outside the contemplation of the parties when the liqui dated damages were agreed, and such damage is not too remote, it may be recovered over and beyond the liquidated damages (Aktieselskabet Reidar v. Arcos Ltd., 1927, I K.B. 352).

If damages are proved in foreign currency, they are converted into legal tender at the rate of exchange prevailing when the cause of action arose, and subsequent fluctuations in the rate of ex change are immaterial.

Interest is only recoverable as damages in exceptional circum stances. (See MONEY LENDING.) Although difficult questions on remoteness often arise, damages for breach of contract can usually be assessed with accuracy since the cost of putting the injured party in the position he would have been in but for the breach can be ascertained by proving the cost of making a contract which will secure to him the like ad vantages. In some cases by custom or practice of the courts a definite measure of damages which differs, or may differ in result from the application of general principles, has been adopted for convenience of assessment in cases which otherwise would be very complicated. Thus where an insured ship is repaired and the owner derives benefit from the substitution of new materials for old, one-third of the cost of the repairs is deducted for this benefit. Similarly, where a domestic servant is wrongfully dismissed, by custom the damages are a month's wages without any allowance for board and lodging during the month. Sometimes, however, the damage from a breach of contract may be difficult of assessment because of the peculiar character of the plaintiff's loss, as where he is deprived of a chancy, of losing a prize, or of the enhanced reputation which an actor or actress may gain, in the contemplation of both parties, by appearing in an important part or in a well known theatre. Difficulty in assessing damages, however, is no reason for refusing to award them or for awarding only nominal damages. The damages for breach of one form of contract—a contract to marry—are peculiarly at large, and the jury may give exemplary damages to mark their disapproval of the defendant's conduct. Generally, however, in contract the common law is con cerned only with the loss which the plaintiff has suffered and is uninfluenced by the motive or good faith of the defendant. Roman law, on the other hand, applied quite a different measure of dam ages when the defendant acted in good faith and when he acted fraudulently. Thus the vendor of a defective article, if he did not know of the defect, was liable only for the difference between the price he received and the price which the buyer would have given if he had known of the defect. If the vendor knew of the defect, however, he would be liable for all injury flowing from the use of the article in its defective condition. Accordingly the Roman and the common law would apply startlingly different measures of damages in cases such as Pinnock Brothers v. Lewis and Peat Ltd., 1923, I K.B. 69o, where copra cake innocently supplied for the manufacture of cattle food contained poisonous castor bean, causing the death of many cattle to which the food was ultimately given. In general, however, the rules governing damages for breach of contract are very similar under all legal systems. Con tinental systems differ from the common law chiefly in their readiness to enforce an agreed measure of damages, whether or not the stipulated damages are a genuine pre-estimate of the probable loss. Scots law follows English law, as it also does in the sale of goods, the Sale of Goods Act, 1893, forming a common code. The Indian contracts code also adopts, in effect, the English rules.

Exemplary Damages.

In some actions for tort, damages can be calculated with exactness as in contract, e.g., in cases of injury to property. Thus, in conversion, the measure of damages is almost always the value of the article converted at the time of the conversion. Where, however, the injury is to the person or reputation, only actual expenses and loss of income caused by the wrong can be proved with exactitude, and the bulk of the damages are at large and consequently within the reasonable discretion of the jury. Consequently the motives and conduct of the defendant may greatly affect the damages awarded. The chief cases where great latitude is allowed are: (I) in actions for defamation; (2) in actions for malicious prosecution and false imprisonment ; (3 ) in cases of outrageous trespass on land; (4) in seduction and breach of promise of marriage; and (5) for adultery. The divorce court has peculiar powers over the application of damages for adultery, however, and may ensure provision for the maintenance and education of children of the marriage or the maintenance of the guilty wife. In assessing damages the jury are often asked to have regard to the means and position of the adulterer. Whether this was proper was much debated, and the grounds for allowing it, as well as the other principles governing damages for adultery were stated, after a review of the authorities, by Mr. Justice McCardie in Butterworth v. Butterworth, 192o, p. 126, to which reference should be made.

In cases of collisions at sea where both ships are to blame, the Admiralty rule is to apportion blame and to make the ships bear the total loss in the proportion of their fault. But this rule does not apply to claims for personal injuries brought in the admiralty court.

Although English law gives compensation for physical injury caused by shock, and for pain and suffering, no allowance is made for wounded feelings as a general rule. In Scots law a solatium for wounded feeling may be allowed. Probably the greatest difference between the two systems, however, is the recognition in English law, but not in Scots law, of the maxim actio personalis moritur cum persona. In English law, as a general rule, a right to recover damages for a tort did not survive the death of either the wrong doer or his victim, and no right of action could be based on the death of a human being. Limited statutory exceptions to the former principle were made as early as Edward III.'s reign and greatly extended in (3 and 4 Will. IV., c. 42), but the excep tions only applied where real or personal property was affected by the tort. The rule continues in cases of defamation and other personal torts. By the Fatal Accidents Act, 1846 (Lord Camp bell's Act) personal representatives of a person killed or fatally injured by a wrongful act have a statutory right of action, if the deceased would himself have had a cause of action, for the benefit of the husband, wife, parent or legitimate child, grandchild or step child of the deceased. But the damages recoverable are limited to financial loss from the death, and account must be taken of all benefit resulting from the death (Carling v. Lebbon, 1927, 2 K.B. I o8) such as a widow's or orphan's pension from the Government. By statute passed in 1908, however, sums payable under policies of insurance do not reduce the damages. Regard may be had, moreover, to the reasonable expectation of pecuniary benefit in the future if the deceased had lived, but the courts will ignore a mere speculative possibility (Barnett v. Cohen, 1921, 2 K.B. 461). Strangers, such as a master deprived by the death of a valuable servant, cannot, however, recover any damages.

In the United States the law of England on damages is gen erally followed, modified, however, in some particulars by statute. Thus, the law in England that a tenant who commits wilful waste on the premises shall pay thrice the amount of the damages is not the law in all States. Likewise the law in England that a tenant who refuses to quit after due notice shall thereafter pay his landlord double rent is not the law in all jurisdictions in the United States.

See T. Sedgwick, Treatise on the Measure of Damages (6th ed., 1874) ; G. J. Bell, Principles of Law of Scotland (loth ed., 1899) ; J. D. Mayne, Treatise on Damages (loth ed. by F. Gahan, 1927).

(F. G.)