Judgments - Dimond (Original Appellant and Cross-Respondent) v. Lovell (Original Respondent and Cross-Appellant)

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    The position is therefore that she did in fact lose the use of her car during the period of repair but has not paid and is not going to have to pay for the hiring of the substitute car. Her claim in the action was confined to the charge for hiring the substitute car for a week. There was a division of opinion in the Court of Appeal whether, assuming that she was entitled to recover the hire charges she had failed to mitigate her loss. This also raised the question what was her loss.

    Mrs. Dimond was at the time of the accident the owner and person in possession of her car. It was damaged. Its value was reduced. This can be expressed as a capital account loss. This loss can be measured as being the cost of making good the damage plus the value of the loss of its use for a week. Since her car was not unrepairable and was not commercially not worth repairing, she was entitled to have her car repaired at the cost of the wrongdoer. Thus the measure of loss is the expenditure required to put it back into the same state as it was in before the accident. This loss is suffered as soon as the car is damaged. If it were destroyed by fire the next day by the negligence of another, the second tortfeasor would only have to pay damages equal to the reduced value of the car and the original tortfeasor would still have to pay damages corresponding to the cost of putting right the damage which he caused to the car. These questions are liable to arise in relation to any damaged chattel and have long ago received authoritative answers in cases concerning ships: The Glenfinlas [1919] P. 363n; The Kingsway [1919] P. 344; The London Corporation [1935] P. 70. These cases also distinguish between the cost of the damage to the chattel and consequential losses to the owner of the chattel such as loss of revenue. However even where the chattel is non profit earning (as was Mrs. Dimond's car) there may still be scope for awarding general damages for loss of use: The Mediana [1900] A.C. 113; Admiralty Commissioners v. S.S. Chekiang [1926] A.C. 637; Admiralty Commissioners v. Susquehanna [1926] A.C. 655.

    I mention these cases and the principles they illustrate to demonstrate that persons such as Mrs. Dimond do not have to survive in an environment where the law does not recognise the losses which they may have suffered and that the law is not without principles covering the provision of compensation and its assessment. Each case depends upon its own facts but loss of use of the chattel in question is, in principle, a loss for which compensation should be paid. However one of the relevant principles is that compensation is not paid for an avoided loss. So, if the plaintiff has been able to avoid suffering a particular head of loss by a process which is not too remote (as is insurance), the plaintiff will not be entitled to recover in respect of that avoided loss. If the loss has only been avoided by incurring a substituted expense, it is that substituted expense which becomes the measure of that head of loss. Under the doctrine of mitigation, it may be the duty of the injured party to take reasonable steps to avoid his loss by incurring that expense.

    The problem in the present context is that in individual cases the individual loss is only small and the process of litigating to recover it disproportionate. This is the underlying problem here and was the problem which the scheme was designed to address, albeit at a cost.

    This leads on to the question of mitigation. I agree with my noble and learned Lord Hoffmann that the judge and the majority of the Court of Appeal approached this question in the wrong manner. What Mrs. Dimond was paying for here was more than the cost of hiring a car for a week. It was reasonable for her to pay the additional sum in order to obtain the additional benefits enjoyable under the scheme even though the accident hire company were under no legal obligation to do more than provide her with a car on credit. The sum which she paid, having regard to what she was to get was, on the evidence, reasonable. But she cannot claim the whole cost as the cost of mitigating the loss of the use of her car. The cost of that was, on the evidence, only about £24 per day. The remainder of what she paid was attributable to other matters and therefore should not be included in the cost of mitigation. This is the preferred way of looking at this aspect of the dispute between the parties on this point but there are other ways which lead to the same conclusion. One is that preferred by Judge L.J. in the Court of Appeal. The excess cost was not reasonably incurred as the cost of hiring the substitute car. Mrs. Dimond's right of recovery is limited to the reasonable cost, that is to say the lesser sum. Another way of looking at the matter is to say, as does my noble and learned friend, that, if the whole cost is to be brought into account, then the benefits must be brought into account as well. This raises the question discussed in British Westinghouse Electric and Manufacturing Co. Ltd. v. Underground Electric Railways Co. of London Ltd. [1912] A.C. 673 and the distinction between what is and is not collateral.

    But as I have said, in the present context, I prefer the approach of making a commercial apportionment between the cost of hiring a car and the cost of the other benefits included in the scheme. The necessity to make some apportionment or other reduction in the claim is demonstrated by the need to avoid double counting. Prima facie, the court should award statutory interest on the claim; but here the claim already included some element of interest. Similarly the claim included something in respect of costs; to award costs as well would involve some duplication. The elements to which the uplift in the charges of the accident hire company was attributable were (and inevitably must be) elements which were not properly included in the claim for damages for loss of use. As appears from what I have said, some might be recovered from the wrongdoer in another form but it is unlikely that any scheme could be devised which would enable the insurance element to be recovered.

    Finally, I agree with my noble and learned friend Lord Hoffmann that there is no basis on which Mrs. Dimond could recover the charges claimed as a trustee or otherwise for the accident hire company. This follows from what I have already said and from the speech of Lord Mustill in Giles v. Thompson.

    I agree that the appeal should be dismissed.


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