Consequential loss: “There has to be a limit for which the defendant is held responsible.”

So was a statement made by the judge at a recent hearing against one of our members following the unwinding of a finance deal and a claim by the consumer for consequential losses arising therefrom.

The consumer’s pleaded case was for just £1,536.00 but she bowled up to the final hearing armed with 400 pages of evidence and a revised claim for £6,230.22!

The legal representative for our member had no great difficulty persuading the judge to limit the claim to the sum pleaded. 

The judge was also reminded of the usual rule (per Hadley and Baxendale) that consequential damages can be recovered only if, at the time the contract was made, the breaching party had reason to foresee that such damages would be the probable result of its breach.

The consumer sought to claim hire charges, Uber travel costs, insurance, recovery, and diagnostic charges.

While it was reasonably foreseeable that if the vehicle broke down there would be recovery and diagnostic charges plus some alternative transport costs, the consumer was under a duty to mitigate her loss to what was “reasonable”.

In this case, the consumer argued that she was unable to buy another vehicle since she could not afford one, hence the scale of her claim for transport costs.

In response to that point, the judge ruled that her impecuniosity was not something our member should be made liable for, and so the question became: “When should the consumer reasonably be expected to obtain an alternative vehicle, rather than racking up further expense with great abandon in the hopeful expectation these could be blithely deposited at our member’s door?”

The consumer was disavowed of such a notion since, as the judge rightly stated, there are limits for which a breaching party can be held responsible.