Mitigate, but don’t tolerate: reducing damages

It is an important principle of the law of England and Wales that unless a claimant seeks to mitigate its loss, or to alleviate any damage suffered by any reasonable means available, before seeking to recover compensation from a defendant, any damages which a defendant is ordered to pay may be reduced accordingly. In the case of Manton Hire & Sales Ltd v Ash Manor Cheese Co Ltd the Court of Appeal considered the oft-quoted partial defence of failure to mitigate, and provided some straightforward and helpful guidance.

After attending Ash Manor’s cold store premises and taking measurements of racking arrangements within which a forklift truck would be required to operate, Manton recommended and supplied a particular model truck to Ash Manor.

The truck turned out to be too big to operate within Ash Manor’s premises and so the company sought to reject the truck and to cancel the hire agreement pursuant to which it had been supplied. Ash Manor knew that it was purchasing the truck from Manton with the benefit of a finance arrangement, but it did not appreciate that the hire arrangement included a provision whereby it remained liable for rental payments even in the event that the truck supplied was unusable for any reason. When Ash Manor realised that it remained liable to the external finance company, it sought an indemnity from Manton…

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