“You’ve got a severe abrasion on your gluteus maximus.”
If you’ve ever heard a doctor proclaim this, you might be concerned about it until you realise that it means nothing more than you’ve got a bruise on your backside. Similarly in claims for breach of contract, the party seeking damages has to show that they’ve actually suffered damage.
If they can’t prove the damage suffered, then even if the terms of the contract are breached, they might only receive nominal damages as part of a court’s judgment. These are where a party has breached a contract, but the other party has not suffered actual damage as a result. As the aim of the court in civil litigation is to put the parties back in the position they were in had the contract not been breached, breaching a contract itself is not something a party can expect to be punished harshly for, however unfair that might seem. Typically, you might get between £5-£10 in damages. Enough for a coffee and a snack, but not worth incurring legal costs for.
There is the option of applying for a declaration of the court as to your legal rights, the existence of certain facts, or just to uphold a particular principle. Such declarations though are usually sought alongside other remedies, such as injunctions or orders for specific performance, which will compel or constrain a party to take or refrain from certain actions and are often worth the time, effort, and cost involved. Seeking a declaration by itself may well prompt the court to consider that you are wasting its time and resources, as illustrated by the recent case of Uzbekov v Revolut Ltd [2024] EWHC 98 (Admin). Here, the claimant sought an authoritative declaration that the defendant had no grounds for suspecting him of money laundering, even though he’d suffered no financial loss when it closed his account. The defendant responded by seeking and obtaining an order for summary judgment leading to the claim being dismissed.
Besides the question of whether a party has incurred loss, the court will also take conduct into account. In Shah v Shah [2021] EWHC 1668 (QB), the claimant had made a Part 36 offer to the defendant, to settle the matter if the defendant accepted £1.00 in nominal damages. The defendant rejected the offer only to see the claimant win £10.00 in nominal damages at a hearing. The court then upheld the terms of the Part 36 offer, that required the defendant to pay the claimant’s substantial legal costs. Meanwhile, in Wright v McCormack [2023] EWCA Civ 892, the claimant, though successful in a libel claim against the defendant, was found to have originally advanced a deliberately false claim. The court responded to this by ruling that, while the defendant’s tweets about the claimant had been defamatory, the defendant only needed to pay £1.00 to the claimant.
So, in any potential claim, it’s always worth reflecting on what the breach of contract has actually cost you. If you’re left scratching your head to find a figure, or if you are in the reverse situation about what possible damage you may have caused, then give Lawgistics a call.
One of the largest independent specialist motor trade brokers in the UK. Our extensive history of supplying insurance to the motor trade means we understand your business needs. By partnering with a specialist insurance broker like us, you get exactly what you need to protect your business.
