Legal remedies are the means with which a court of law, in a civil law context, enforces a right, provides compensation or makes some other court order as a means of resolving a contractual, tortious or other type of dispute. Such remedies can generally be divided into two categories: legal and equitable.
Legal remedies allow the innocent or aggrieved party to recover damages. In contrast, equitable remedies provide a non-monetary solution to resolving a dispute. Equitable remedies are typically granted when compensation cannot adequately resolve the wrongdoing.
This article examines the legal remedy of damages available to the court in the context of both contract and tort law, in particular the general principles relating to the recovery of damages. We also touch upon the two main equitable remedies that may be prescribed in a contractual or tortious context.
Legal remedies: Damages
Damages represent the principal legal remedy available in contract and tort law, the purpose of which is compensatory. In short, damages are an award of money to compensate the innocent or aggrieved party for any breach or wrongdoing.
The overriding aim of an award of damages arising from a breach of contract is to put the innocent party, so far as money can do it, in the position he would have been in had the contract been properly performed. In contrast, damages awarded in respect of a wrongful or negligent act is to put the injured party in the position he would have been in had the tort not occurred.
In either context, there are various different legal principles that will determine whether or not a claimant will be successful in recovering damages, in particular causation, remoteness and mitigation.
Causation is a principle used in the assessment of damages for both breach of contract or tort. To claim contractual or tortious damages, the claimant must first prove, on a balance of probabilities, that the breach of contract or duty actually caused the loss complained of.
In establishing whether or not there is a a causal connection between the breach and the loss sustained, the courts will apply the “but for” test. In other words, if the loss would have happened in any event, then the breach could not be said to have caused the loss.
Factors that may require special consideration are whether or not there are multiple causes of the damage, and/or whether there have been intervening acts contributing to or exacerbating the damage.
Remoteness is a principle used to determine legal causation. This is different from factual causation that examines whether the damage actually resulted from the breach. Once factual causation has been established, it is necessary to ask whether the law is prepared to attribute the damage to the particular breach of contract or duty, notwithstanding the factual connection.
Damage that is too remote is not recoverable, even if there is a causal link between the breach and the loss. In breach of contract claims, remoteness comprises a two-limb test: first, whether the loss arises naturally from the breach and, second, whether the loss was within the reasonable contemplation of the parties as being a consequence of the breach at the time they entered into the contract.
In applying the test of remoteness in a contract claim, the court may also look to whether or not the defendant can be said to have assumed responsibility for the type of loss in question.
In tort law, in particular negligence and nuisance, the test for remoteness of damage is whether the kind of damage suffered was reasonably foreseeable by the defendant at the time of the breach of duty. Provided that the kind of damage is reasonably foreseeable, it does not matter that the way in which the wrongdoing was inflicted or its extent was unforeseeable.
Mitigation refers to the duty upon the claimant to minimise his/her loss and to avoid taking unreasonable steps that increase that loss. An injured party cannot recover damages for any loss, whether caused by a breach of contract or breach of duty, which could have been avoided by taking reasonable steps.
Whilst the duty to mitigate is not an actionable breach of duty, any failure to mitigate loss will impact on the level of damages recoverable. However, in mitigating any loss, the claimant is only required to act reasonably.
Damages may not always be an adequate remedy or, indeed, an appropriate one. This may be the case in the context of an anticipatory breach of contract, ie; where the contract has not yet been breached but action is proposed that will amount to breach, or where legal intervention is necessary to prevent a future tortious wrong. In such circumstances, it may be more appropriate to seek some form of equitable remedy, in addition to or in lieu of any claim for damages.
There are two main equitable remedies available to the court: injunctions and specific performance. Unlike damages, which are available as of right, these equitable remedies are granted at the court’s discretion.
An order for injunctive relief may be mandatory or prohibitory. The former requires a party to do something, whilst the latter stops a party from doing something. The courts are typically more willing to grant prohibitory injunctions, restraining a party from taking a certain step, than they are to order mandatory injunctions, which would require the taking of action.
Injunctions can be ordered on an interim basis, effectively preserving the status quo until the underlying dispute between the parties can be resolved. They can also be ordered on a final basis.
In contractual disputes, injunctions are commonly used to restrain a respondent from dealing with or disposing of property until a disputed issue has been determined. In tortious claims, injunctions are most commonly used in the torts of nuisance and trespass to prevent further wrongdoing.
An order for specific performance may, in limited circumstances, be an appropriate alternative remedy to damages in a contractual dispute. Specific performance compels a party to perform its contractual obligations. This can include, for example, requiring the breaching party to deliver goods that have already been paid for or to render payment for services already received.
The courts are, however, often reluctant to order a party to unwillingly perform their contractual obligations. Accordingly, in considering whether to grant specific performance the court will look closely to whether damages would be an adequate remedy in the context of the particular type of contract. By way of example, the court would be unlikely to order specific performance of a contract for personal services.
The court will also look to whether there is any bar to equitable relief, for example, whether the claimant’s own conduct has in some way been improper and, as such, whether or not the claimant has come to court with “clean hands”.
For an in-depth look at legal remedies
The topic of legal remedies is a highly complex and substantial area of law. This article provides only an overview of some of the legal principles involved. For detailed guidance on legal remedies students should refer to specific texts or analysis on the subject, with reference to any statutory provisions and all recent and leading case law.
The matters contained in this article are intended to be for information purposes only. This article does not constitute legal advice and should not be treated as such. Whilst every effort is made to ensure that the information is correct, no warranty, express or implied, is given as to its accuracy and no liability is accepted for any error or omission. Before acting on any of the information contained herein, expert legal advice should be sought.