Mitigation of Damages

The legal framework for mitigation of damages in Ireland

In Ireland, under section 34(2)(b) of the Civil Liability Act 1961, a negligent or careless failure to mitigate damage shall be treated as contributory negligence on the part of a plaintiff. As a result, their award will be reduced in proportion to their failure to prevent or reduce the losses suffered.

In personal injury law, if a plaintiff is deemed medically fit to return to work or has been offered a suitable alternative position of employment and they refuse to do so – this can be deemed as a failure to mitigate their loss of earnings claim.

In contract law, a plaintiff will be required to take steps to minimise their losses once a breach of contract by a defendant has occurred. For example, a fishing vessel rental company’s claim for damages to one of its boats as a result of abandonment was significantly reduced for failing to bring the boat back into its possession following the termination of the contract for hire[1].

In the context of employment and unfair dismissal cases, the Unfair Dismissals Acts provide that any compensation payable to an employee who has been unfairly dismissed may be reduced where the employee has failed to mitigate their loss. Failure to mitigate in this sense will include where an employee has failed to seek alternative employment[2] or refused an offer of re-employment[3].

What “reasonable” steps is a plaintiff required to take?

A plaintiff’s duty to mitigate their losses is limited to taking all reasonable steps to minimise their loss. What is reasonable is a question of fact and it is determined on a case by case basis. The courts have adopted a practical approach to the issue of reasonableness, clarifying that the standard by which a plaintiff is to be judged is not an excessively harsh one.

For example, while a personal injury plaintiff may be required to mitigate their loss by obtaining proper medical treatment, a plaintiff who declines to undergo an unduly risky procedure is unlikely to be considered to have acted unreasonably in doing so.

Where a plaintiff is presented with a choice of methods of mitigating damage, each of which is considered reasonable in the circumstances, a defendant cannot argue that the plaintiff acted unreasonably where it transpires that the loss would have been less had the plaintiff adopted another method. Similarly, the courts have cautioned against the use of hindsight to determine the best course of action a plaintiff may have taken in mitigating their loss.

Importantly, the onus of proving that a plaintiff has failed to take all reasonable steps rests on the defendant.

The consequences of failure to mitigate damages

It is important to highlight that where a defendant successfully establishes that a plaintiff failed to mitigate their loss, this does not mean that the plaintiff is unable to recover some portion of their losses. Instead, where a plaintiff fails to take all reasonable steps to mitigate their loss, this will often lead to a deduction being made to any award of damages. The deduction will be in proportion to any loss incurred as a result of the plaintiff’s failure to mitigate. Where a plaintiff is found to have negligently or carelessly failed to mitigate their losses, this will be considered contributory negligence. Where contributory negligence is established, the damages awarded to the plaintiff are reduced in accordance with their contribution to the loss or harm.

Expenses incurred in mitigation

A plaintiff will usually be entitled to recover the costs incurred by them in seeking to mitigate their loss, even in circumstances where the resulting damage is greater than it would have been had the mitigating steps not been taken at all. For example, in a personal injury claim a plaintiff would be able to recover expenses incurred for attending physiotherapy or getting pain injections if they are recommended as a means to aid recovery from the injuries sustained. The reasonableness of steps taken to mitigate will be decided on a case-by-case basis.

For more information and expert advice, please contact a member of our Insurance & Risk team.

The content of this article is provided for information purposes only and does not constitute legal or other advice.

[1] Bord Iascaigh Mhara v Scallan, Uunreported, High Court, May 8, 1973

[2] See Sheehan and Continental Administration Company Limited UD 858/1999

[3] See Murphy v Valley Investment Ltd UD 112/1980