Recovery for Avoided Loss: Towards a New Account of Mitigation

Abstract

‘Avoided loss’ means the loss that the claimant would have been expected to suffer in the ordinary course of events but which he does not in fact suffer. The leading texts assert that ‘claimants cannot recover for avoided loss,’ or that they can do so only in exceptional circumstances. This paper challenges that orthodoxy. It contends that in the context of mitigation claimants frequently recover damages for avoided loss. A new interpretative account of mitigation is required: damages are assessed as if the claimant had acted reasonably, even where the claimant’s conduct in fact departed from that expectation (for better or worse).