Special damages

Special damages compensate the claimant for the quantifiable monetary losses suffered by the plaintiff. For example, extra costs, repair or replacement of damaged property, lost earnings (both historically and in the future), loss of irreplaceable items, and additional domestic costs etc. They are seen in both personal and commercial actions.

Special damages can include direct losses (such as amounts the claimant had to spend to try to mitigate problems) and consequential or economic losses resulting from lost profits in a business.

Damages in tort are awarded generally to place the claimant in the position in which he would have been had the tort not taken place. Damages for breach of contract are generally awarded to place the claimant in the position in which he would have been had the contract not been breached. This can often result in a different measure of damages. In cases where it is possible to frame a claim in either contract or tort, it is necessary to be aware of what gives the best outcome.

If the transaction was a good bargain contract generally gives a better result for the claimant.

As an example, Fred sells Bob a watch for £100. Fred tells Bob it is an antique Rolex. In fact it is a fake one and worth £50. If it had been a genuine antique Rolex, it would be worth £500. Fred is in breach of contract and could be sued. In contract, Bob is entitled to an item worth £500, but he has only one worth £50. His damages are £450. Fred also induced Bob to enter into the contract through a misrepresentation (a tort). If Bob sues in tort, he is entitled to damages that put himself back to the same financial position place he would have been in had the misrepresentation not been made. He would clearly not have entered into the contract knowing the watch was fake, and is entitled to his £100 back. Thus his damages in tort are £100.

If the transaction were a bad bargain, tort gives a better result for the claimant. If in the above example Bob had overpaid, paying £750 for the watch, his damages in contract would still be £450 (giving him the item he contracted to buy), however in tort damages are £700. This is because damages in tort put him in the position he would have been in had the tort not taken place, and are calculated as his money back (£750) less the value of what he actually got (£50).

Direct losses and consequential losses

Special damages are sometimes divided into direct losses, and consequential or economic losses.

Direct losses include the costs needed to remedy problems and put things right. The largest element is likely to be the reinstatement of property damage. Take for example a factory which was burnt down by the negligence of a contractor. The claimant would be entitled to the direct costs required to rebuild the factory and replace the damaged machinery.

The claimant may also be entitled to any consequential losses. These are the lost profits that the claimant could have been expected to make in the period whilst the factory was closed and rebuilt.

Foreseeability and remoteness

Damages are likely to be limited to those reasonably foreseeable by the defendant. If a defendant could not reasonably have foreseen that someone might be hurt by his or her actions, then there may be no liability. This is known as remoteness.

This rule does not usually apply to intentional torts (e.g. deceit), and also has stunted applicability to the quantum in negligence where the maxim Intended consequences are never too remote applies, never is inaccurate here but resorts to unforeseeable direct and natural consequences of an act.

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