Law of Damages Notes PDF

Preview

Summary

damages notes...

Description

CLS cc © Damages Notes 1

LAW OF DAMAGES NOTES: CHAPTER 1: Definition, nature and scope of the law of damages Definition: The law of damage is that part of the law which indicates how the existence and extent of damage, as well as the proper amount of damages are to be determined in the case of delict, breach of contract and other legal principles providing for the payment of damages. Nature and scope The law of damages should be defined as constituting of principles regarding the compensation of all forms of damage. The law of damages determines the content of an obligation to pay damages or satisfaction. The object of the law of damages should be seen as the provision of just, logical and practical rules and principles in solving problems regarding the determination of damage, damages and satisfaction. What will give rise to a claim for damages? 1) Delictual remedies: a) The actio legis aquiliae which provides for damages on account for unlawful and culpable causing of any patrimonial loss b) Actio inuriarum: satisfaction may be recovered for unlawful and intentional personality infringement c) Action for pain and suffering: damages for nonpatrimonial loss on account of the unlawful and culpable infringement of the physical-mental integrity 2) Liability without fault and liability based on risk: a) The actio de pauperie: damages for patrimonial and nonpatrimonial loss caused by animals are recoverable b) Actio de pastu: compensation for patrimonial loss may be recovered where an animal has caused damage through eating and damaging plants c) Vicarious liability: a duty to pay damages or satisfaction is placed on the defendant because of a delict of another 3) Legislation 4) Breach of contract 5) Contract and realization of risk (insurance contract): the conclusion of a contract and the subsequent realization of risk are a source for the claim of damages where an insurer has given a contractual undertaking to indemnify the insured in terms of a policy if the realization of risk causes damage 6) Claims based on a right of recourse or adjustment

Critical Law Studies CC ©

CLS cc © Damages Notes 2

Definitions – NB!! Damage: is the reduction as a result of the damage causing event, of the use or quality of a patrimonial or personality interest in satisfying the legally recognized needs of the person involved Patrimonial loss: is the diminution in the utility of a patrimonial interest in satisfying the recognized needs of the person entitled to such interest. It may be defined as the loss or reduction of a positive asset in someone’s patrimony or the creation or increase of a negative element Patrimony: consists of all subjective rights having a monetary value as well as the expectation of acquiring such rights. In a factual and economic sense its everything of an individual which has a monetary value and which may be used by him in satisfying his legally recognized needs Non-patrimonial loss: is the reduction in the quality of a highly personal interest of an individual in satisfying his legally recognized needs but which does not affect his patrimony Damage-causing event: it’s a factual situation of an uncertain nature, which has brought about damage. The factual situation consists of conduct which may in principle lead to delictual liability or liability for breach of contract, which may bring about a duty to pay compensation Affective loss: this is someone’s emotional reaction caused by having to suffer any kind of damage or invasion of his rights Damages: Is the monetary equivalent of damage awarded to a person with the object of eliminating as fully as possible his past as well as his future damage. Compensation: in a narrow sense compensation denotes damage – in general it’s the reparation of any patrimonial or non-patrimonial loss Satisfaction: means that the law is upheld through penance and it denotes the psychological gratification, which the victim of an injustice receives. It implies the reparation of damage in the for of injury to personality by effecting retribution for the wrong suffered by the plaintiff and by satisfying the plaintiffs and the communities sense of justice Compensation for non-patrimonial loss: an appropriate amount of money is awarded to someone who has suffered non-patrimonial loss, in an attempt to neutralize his loss through the fact that the money may bring happiness or comfort to him to assist him in overcoming his loss Solatium: money Sum-formula: is a method in which damage is determined by subtracting the plaintiffs present patrimonial position (after the occurrence of the damage causing event) from a hypothetical patrimonial position which he would presently have enjoyed had the damage causing event not occurred Concrete concept of damage: damage is determined by comparing the utility of an element of the plaintiffs patrimony before the damage Critical Law Studies CC ©

CLS cc © Damages Notes 3

causing event occurred with its utility after the damage causing event. “Once and for all” rule: plaintiff may in general only once claim damages or satisfaction for all the damage based on a single cause of action – he therefore e has to claim for loss already suffered as well as all prospective loss Cause of action: this means that all the elements or facts necessary to found a claim for damages or satisfaction are present. A cause of action accrues (if all other facts are present) as soon as some damage is suffered. Collateral benefits: this refers to a situation where the plaintiff also receives some benefit as a result of the damage-causing event. If such benefit is taken into account in reducing his recoverable damages, it is said that the collateral source rule doesn’t apply. This means the defendant’s liability to pay damages is accordingly reduced. Res inter alios acta: this is a situation where the collateral source rule does apply General and special damage: general damage is usually that damage which is presumed to flow from an unlawful act – in contract general damage is the damage that flows naturally from a breach of contract and which the law presumes that the parties have contemplated would result from such a breach. Special damage refers to damage which the law doesn’t presume to be the necessary consequence of the act complained of and which must be specially pleaded and established by evidence – in contract special damage refers to loss which is normally too remote and for which damages may be recovered only if the parties actually or presumably foresaw that it would result Nominal damages: this is the payment of a small amount of money to a plaintiff that has proved an invasion of his rights but no damage Nominalism: Legal concept that an obligation to pay a certain sum remains unchanged whether or not the currency in which it was to be paid appreciates or depreciates. Id quod interest, interesse: this is the full patrimonial damage or loss sustained by the plaintiff for which damages are recoverable Damnum emergens, lucrum cessans: damnum emergens – means damage (patrimonial loss) which has been suffered and for which damages are claimed – refers to loss already sustained. Lucrum cessans – means loss of profits and some forms of prospective loss. Prospective loss: this is damage in the form of patrimonial and nonpatrimonial loss which will, with a sufficient degree of probability, materialize after the time of assessment of damage on account of an earlier damage causing event Positive and negative interesse: in contract – positive interesse usually refers to the total interests which a contractual party has in the other party fulfilling his contractual obligations = all damage which he has already suffered and will probably suffer in the future as a result of the breach.

Critical Law Studies CC ©

CLS cc © Damages Notes 4

Negative interesse: is determined with reference to the position in which a contracting party found himself immediately before concluding a contract, or the position immediately before a delict was committed against him. Discounting: the reduction of an amount of damages awarded for future loss by using an appropriate rate of interest in order to ensure that the plaintiff doesn’t receive an undue benefit through the advanced receipt of such damages. Annuity: this is relevant to the case of loss of future income or support – it refers to a capital sum, presently payable, which, with the addition of interest that may be earned on it, will give the plaintiff a periodic yearly payment from capital and interest for a fixed number of years in order to replace the loss of income or support and the figure arrived at should be such that at the end of the period there would be no capital and interest left. Contingencies: this refers to future possibilities of some degree of probability which have an influence on the assessment of the plaintiff’s future loss or the future benefits to which he may be entitled. Limitation of liability: someone whose liable to pay damages isn’t liable for all harmful consequences of his conduct and some measure is used to impose a limit on his liability

Critical Law Studies CC ©

CLS cc © Damages Notes 5

CHAPTER 2: The concept of damage Definition: damage is the diminution as a result of a damage causing event in the use/quality of a patrimonial or personality interest, in satisfying the legally recognized needs of the person involved. Diminution: is the reduction which takes place for patrimonial interests – the reduction in utility is measured by a monetary standard. Personality interest: the reduction in quality is expressed in natural terms. Causal element: Damage must have been caused by something – the law requires a damage causing event = factual situation of an uncertain nature which according to the law may cause damage or has in fact caused damage. Interest element: Either a patrimonial or personality interest is subject to the reduction. Normative element: Legal norms co-determine the existence and nature of damage – the nature of the reduction in the use/quality of an interest in satisfying someone legally recognized needs. Time element: A reduction, which has already occurred at the time of the trial, as well as one expected with a sufficient degree of probability to materialize in the future, is taken into account. Origin of patrimonial damage: Mommsen = to him damage is the difference between the present patrimonial position of the plaintiff and the patrimonial position which would have existed if the damage causing event had not taken place (sum formula approach). Extent of the concept of damage General: Damage includes more than harm for which compensation is recoverable, for satisfaction may be awarded in respect of some forms of damage. Only harm in regard to legally recognized patrimonial and personality interests is damage = De Vos v SA Eagle.

Critical Law Studies CC ©

CLS cc © Damages Notes 6

Damage is restarted to the reduction in the use and quality of interests which have been brought about by a damage causing event = events of an uncertain nature. Any reduction which is sure to take place = wear and tear, illness due to natural causes, age, death, consumption of food, can generally be defined as damage. Where someone voluntarily incurs a debt as a reasonable reaction to an event which was outside his control = damage, because it was caused by an uncertain event. Intentional conduct by someone in causing harm = uncertain event and may thus cause damage. Relationship between patrimonial and non-patrimonial loss Damage includes harm in regard to a person’s patrimony or his personality. The common factor between patrimonial and non-patrimonial loss = in both the utility and quality of a legally protected interest is infringed. Difference between the 2 forms of damage 1) Patrimonial loss can be directly measured in money, nonpatrimonial loss is only indirectly measured in this way 2) The amount of damages for patrimonial loss may be calculated by using an objective criterion such as the market value or reasonable cost of repairs. Compensation for non-patrimonial damage is based on the subjective injury to feelings and can be assessed by means of a fair estimate 3) Damages for patrimonial loss are f the same nature as the impaired patrimonial interest and thus can be the true equivalent of such damage. In non-patrimonial loss there is no real relationship between the money and the loss 4) In patrimonial loss the use of a patrimonial interest is impaired. While a personality interest is the subject of diminution in nonpatrimonial loss. Damage and wrongfulness Connection between damage and wrongfulness From the nature of wrongfulness and damage – in both the impairment of a certain interest is relevant = common denominator = fact that the conduct can be described as wrongful only if it has caused a harmful consequence. E.g. X drives at 200km/h in an urban area but causes no accident = she hasn’t acted wrongfully for the purposes of private law since there is no harmful consequence.

Critical Law Studies CC ©

CLS cc © Damages Notes 7

Distinction between wrongfulness and damage: In determining wrongfulness the question is whether the infringement of the interest is in violation of a legal norm. When damage is assessed, the law is concerned with the reduction in the use/quality of the interest. Wrongfulness without damage X acts unlawfully when he steals a valueless object from Y, when he is on Y’s land without a lawful reason, but causes no harm. BUT although wrongfulness is present there is no damage. Damage without wrongfulness Where a bolt of lightning causes X’s house to burn down. • No wrongfulness and no damage Where X’s property is destroyed, a stranger Y doesn’t suffer damage and there is no unlawful act against Y. There can be no wrongfulness as Y has no right to X’s property – there is no damage because the property doesn’t form part of Y’s patrimony. •

Wrongfulness and damage both present

Damage which flows from wrongfulness and culpable conduct. Close relationship between damage and wrongfulness Van der Merwe and Olivier are of the opinion that a close connection exists between wrongfulness and damage = damage is the diminution of patrimony, which flows from the infringement of a right. A, who breaks a window of B, in a situation of necessity – B can claim damages from A because of the situation of necessity – B has suffered no patrimonial loss in a juridical sense. They therefore are including wrongfulness in their definition of damage. Illegal earnings The law denies compensation where bodily injuries prevent someone from earning money illegally. • 1 view: wrongfulness is absent because a person can have no right to earn income unlawfully = both damage and wrongfulness are absent Someone who earns money through an unlawful activity isn’t using his earning capacity as part of his patrimony and therefore the frustration of such activities can’t constitute damage. A thief who wants to claim compensation for damage to the stolen article suffers no damage because he has no legally recognized interest in the stolen property.

Critical Law Studies CC ©

CLS cc © Damages Notes 8

There can be no wrongfulness because the thief has no right that can be infringed – there is no damage because the patrimony of the thief hasn’t been diminished. Reinecke: where X, who is injured, loses income from unlawful sources, wrongfulness exists because his right to bodily integrity has been infringes – thus the fact that X, who has been wrongfully and negligently injured may claim compensation for medical expenses and pain and suffering, and doesn’t need to prove that his loss of illegal earnings has also been caused wrongfully. Where X who earns income unlawfully, is injured – the fact that he cant recover compensation for such loss doesn’t exclude a claim for the possible impairment of his lawful earning capacity – the same act may cause X not only to lose his illegal earnings but also his capacity to earn money lawfully. Maintenance earned illegally Reinecke argues that other considerations apply to a dependant whose breadwinner has been killed, than those, which apply to unlawful earnings. A dependant doesn’t merely have an expectation of support; he has a continuous personal right to such support. Test to establish the existence of damage: Would the dependant be able to institute a successful claim for maintenance against his breadwinner if the latter had nothing else but the proceeds of his illegal earnings = YES Criticisms: a dependant’s right to claim support from his breadwinner is closely related to the breadwinner’s capacity to provide such support = the dependant can have no right to be supported out of stolen money. Even if the dependant isn’t to be blamed for the breadwinners earning capacity, its dependant on who bears the risk involved with such income. In a normal situation where the breadwinner despite his illegal earnings may have had the capacity to employ lawful methods of earning money in the future, his death may be seen as an infringement of the dependants right to such support. In this situation a dependant’s damage must be assessed by considering all the evidence regarding the value of the right he has lost. The value of his right may be proved only by evidence of how the breadwinner could have earned income lawfully. Damage and fault Fault (blameworthiness) can’t cause damage. Damage must exist independently of intention or negligence.

Critical Law Studies CC ©

CLS cc © Damages Notes 9

Although damage may exist independently of fault, damage may codetermine whether someone has acted intentionally or negligently – for intention the actor must direct his will to the causing of a harmful consequence. Negligence is present if the reasonable person in the position of the actor would have foreseen and prevented harm.

Critical Law Studies CC ©

CLS cc © Damages Notes 10

CHAPTER 3: The nature, causing and forms of patrimonial loss Patrimonial loss: is the diminution in the utility of a patrimonial interest in satisfying the legally recognized needs of the person entitled to such an interest = loss/reduction in the value of a positive asset in someone’s patrimony or the creation or increase of a negative element. A person’s patrimony (estate) Introduction: Patrimonial damage consists in the reduction of the utility (measured in money) of someone’s patrimony. Q: how to identify the interests that constitute a patrimony? a) Legal concept of patrimony – consists of all patrimonial rights of a person, as well as expectancies which may lead to the acquisition of patrimonial rights b) Patrimony may be seen in the factual and economic sense as everything of an individual with a monetary value which may be used to satisfy his recognized needs, irrespective of whether he has any right to such object. Criticism: valueless subjective rights can’t be seen as someone’s patrimony – if X is the owner of a worthless object which is destroyed by Y, X doesn’t suffer any patrimonial loss. Patrimony in a factual and economic sense: Patrimony – in the law of damages refers to all objects, which may be employed by the subject thereof (person) in a way in order to satisfy his legally recognized needs. Bloembergen – defines patrimony as everything of a person, which has a monetary value, irrespective of the existence of a right to such a thing. According to him: someone’s patrimony in the legal sense may remain unchanged while damage occurs = where X’s property is stolen he clearly suffers damage, but his legal position remains unchanged because he retains ownership of the property. A proposed legal concept of patrimony: A legally recognized relationship is required between a person and an object/interest before the person can suffer damage – X isn’t affected by damage caused to Y’s property. The patrimony of a person consists of positive as well as negative elements, which constitute his total estate.

Critical Law Studies CC ©

CLS cc © Damages Notes 11

Patrimony isn’t only involved with ri...