Have you been wronged? Affected by personal injury or a breach of building contract?

If so, this article outlines the main factors which a court or tribunal will consider when determining the value or amount of any compensation to which you are entitled in a civil claim for damages.

Principles

When determining compensation amounts, several principles guide court/tribunal considerations:

• The purpose of compensation is to award fair and reasonable recompense for the wrong that you have suffered. It is not to punish the wrongdoer.
• Damages amounts are measured in terms of today’s monetary value of the award. Likely future effects such as inflation are not considered.
• Damages are awarded only once. Once damages have been awarded, you cannot seek further or additional compensation even if your injury deteriorates or damages turn out to be more serious or extensive than originally thought.
• When determining compensation amounts, neither the legal costs associated with pursuing the claim or the capacity of the defendant to pay the awarded amount are considered. In addition, responsibility to chase down the defendant and receive payment lies with the plaintiff. Where the defendant is unable to pay, plaintiffs may miss out on some or all of the compensation to which they would otherwise be entitled. You should therefore think carefully about the defendant’s financial and payment capacity before going too far in your litigation.
• Defendants are liable only for the injury which they actually caused. For a defendant to be liable, there needs to be a causal link between their actions (or omissions) and any injury suffered or damage caused. Defendants cannot be liable for damages that are too remote from their act (or omission). In addition, the liability of defendants is restricted to the portion of damages which resulted from their actions or inaction. There is also an obligation on you as the plaintiff to take reasonable steps to avoid or mitigate potential damage to yourself as best they can.
• The defendant must take the plaintiff as they find them. Where the plaintiff is particularly vulnerable or susceptible to damage or injury from the defendant’s act (or omission), then that is too bad on the defendant. The law says they should have considered this before committing the wrongdoing. It comes back to the principle of fair and reasonable compensation for the plaintiff for the injury or financial loss or damage they have suffered.
• Proof is critical. As a plaintiff, the onus will be on you to produce sufficient evidence which demonstrates to the court’s satisfaction that on the balance of probabilities, it is more likely than less likely that the damage or loss has occurred, the time at which it occurred and that the loss or damage was caused by either action or inaction on the part of the defendant.

Exceptions to General Principles

There are, however, exceptions to the above.

Whilst the purpose of damages is generally to compensate victims rather than to punish defendants, courts can award aggravated damages in cases where defendant conduct has been so poor that the court considers that an element of punishment is justified. These types of damages are rare. When awarding them, courts still observe the principle of fair and reasonable compensation.

Beyond this, exemplary damages can be awarded where defendant conduct is malicious or reckless and the court wishes to make an example of them. As with aggravated damages, exemplary damages are rare.

Next, whilst this article generally refers to cases where the value or amount of loss suffered and damage caused is uncertain at the time of the award, courts and tribunals will generally uphold the value of any pre-estimates of damage values where these are reasonable. This would occur, for example, where a building contract specified a certain value of compensations (say $250 per week) for any delays in project completion and handover.

Finally, damages are often reduced (especially in personal injury cases) for what is called the vicissitudes of life. This might occur, for example, were the value of the economic loss or injury suffered by the plaintiff is diminished on account of personal circumstances such as sickness or unemployment (and thus reduced earning capacity) or the shutdown or closure of a business. Often, contingencies can reduce compensation awards by up to 10 or 15 percent. The amount of any reduction will vary according to the overall case and the future prospects of the plaintiff based on their current state and activities.

Damages can also be reduced by contributory negligence. This occurs where a plaintiff’s own recklessness or negligence contributes to or exacerbates any damage or loss. Where this happens, the amount of compensation is reduced on a proportional basis according to the degree to which the plaintiff is themselves deemed to be responsible for the damage or loss.

Conclusion

Deciding upon and calculating compensation amounts can be complex.

When undertaking this, tribunals and courts consider aforementioned factors along with any other matters which are relevant to the case in question.

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