Damages under Tort Law

The article states about the Damages under Tort Law written by Akshat Tripathi, student of NMIMS School of Law, Mumbai.

Introduction

Damages under Tort Law is referred to as a form of compensation that a person responsible for the tortious activity gives to the victim.  

“Damages” is often mistaken for “damage.” It should be known, though, that these two words are significantly different and distinct from one another. Although “damages” refers to the compensation awarded or sought, “damage” refers to the harm or loss that has been done.

In order to claim damages, person is required to show that he has suffered an injury (violation of legal rights); unless he proves that, he couldn’t claim damages. It can be understood by two maxims:

Injuria sine damno: It means that there is a legal injury without any actual damage. Here the legal right of an individual is violated therefore he has a right to go to the court to enforce such right. It will be immaterial that he didn’t suffer any loss, as long as there is violation of his rights, he can claim damages.

Damnum sine injuria: It means that there is actual damage but no legal injury and thus the person cannot go to the court to enforce his right because he has no such right in the absence of a legal injury.

It is notable at this juncture that, in general, losses can be distinguished from rewards. Compensation is a wider category that covers payments rendered to an individual for any form of loss or harm incurred due to illegal causes such as the possession of the property from another party or regulatory infringement, termination of a job; moreover, penalties derive from wrongs in motion.

Damages have acquired a great deal of importance, especially in the sense of commercial transactions and as disciplinary remedies for the infringement of the rights of persons involved.

Kinds of Damages

When the plaintiff suffers loss or injury due to the wrongful act of the defendant then he is entitled to receive damages from the defendant. Damages are, therefore, the sum of money which the plaintiff is entitled to receive from the defendant(wrongdoer) as compensation; for the injuries or losses suffered by him. Thus, the damage is the loss which is the cause of the award of the damages. Damages are of the following kinds:

1. Contemptuous Damages
2. Nominal Damages
3. Ordinary Damages
4. Aggravated Damages
5. Exemplary Damages
6. Prospective Damages

Contempuous Damages

These damages are awarded because it is felt that a lawsuit against the defendant is for a very trivial issue, for which he/she shouldn’t have approached the Court. The complainant may be legally correct here, however morally incorrect. Courts in these situations grant compensation which is very minimal. Contemptuous damages are often referred to as damages ‘derisory.’

Nominal Damages

In such situations where the civil right of the claimant is violated but there is no damage, negligible damages are awarded. For instance, without permission, a person walks across another’s property, thereby committing trespass-the landowner takes no physical damage. The judge can grant minimal damages in such a case, say few hundred rupees.

In Ashby v. White, in the parliamentary elections in England, the appellant wrongfully failed to register the complainant’s properly tendered vote. There was no defeat for the appellant since the candidate he would have chosen to vote for was chosen. The defendant was responsible for a total of 5 pounds, along with the court expenses.

Ordinary, Aggravated and Exemplary Damages

‘Compensatory’ damages are sometimes referred to as regular damages. By allowing him cash reward equal to the injury sustained by him, ordinary damages are awarded to compensate the wounded person equally. Aggravated damages are awarded where, on account of the manner of commission of a tort, the judge raises the damages. Therefore, an act committed willfully, maliciously or with excessive regard in the course of an attack could call for a higher award. Aggravated damages are considered such damages.

Exemplary damages are sometimes referred to as ‘punitive’,’ vengeful’ or ‘compensatory‘ damages. And the difference drawn by Pearson L.J. is that the penalties of this sort are not meant as restitution for his loss to the complainant, but as what the Americans call “smart money,” a form of retribution for the claimant and a threat against unwelcome conduct to others. This purpose, though, is foreign to the general philosophy of the law of tort.

According to Lord Devlin, exemplary damages can be awarded in the following three exceptional cases:

1. Where the plaintiff has been aggrieved by oppressive, arbitrary or unconstitutional action by servants of the government, “though not when he is subjected to similar treatment by corporation’s or private individuals.”
2. Where the defendant’s conduct “has been calculated by him to make a profit for himself which may well exceed the compensation payable by him to the plaintiff…. Exemplary damages can properly be awarded whenever it is necessary to teach a wrongdoer that tort does not pay”
3. Where Exemplary damages are authorised by the Statute.

In India, the above rule has been followed. A beautiful illustration is the recent case of Bhim Singh v. State of J & K, where Mr Bhim Singh, an M.L.A., was arrested and detained to prevent him from attending the Assembly Session. The Supreme Court considered it to be an appropriate case for awarding exemplary damages amounting to  Rs. 50,000.

Prospective Damages

Not only can a tort inflict current injury, but also continuous or potential damage, as if a person is severely harmed and then robbed of potential earning capacity. Yet common law insisted that with all damages, current and future, there should be one suit since public justice requires an end to lawsuits.

This being so, provision is not only made in the form of ‘prospective’ damages for current injury but also as best it can be for potential loss. On this topic, a case worth noting is that of Y.S. Kumar v. Kuldip Singh, of which the Excise and Taxation Officer was the respondent. A vehicle struck him, which resulted in physical damage to his ankle. Owing to those injuries that impacted his enjoyment of his daily life, he suffered permanent disability.

The High Court of Punjab and Haryana paid a prospective reward of Rs. 7,200 estimated at Rs. 50 p.m. In regards to physical injury and lack of enjoyment of everyday life for a period of 12 years,

Thus, it has been shown that in one and the same action, the damages are measured. For the same cause of action, there should not be more than one suit.

There are, however, two exceptions to the above rule:

(a) if the same wrongful conduct violates two different rights, different acts are allowable. (For example, the appellant was a car driver in Brunsden v. Humphrey. He was seriously injured and his car was destroyed due to the servant of the defendant’s negligence. He regained the car for the damage and then brought a separate suit for personal injury. Held:  the latter allegation was maintainable since there were distinct causes of action.)

(b) Because the tort is an ongoing one, subsequent sue for personal injuries.

Damages for Tort

The measure of damages or test by which the amount of damages is to be ascertained is, in general, the same both in a contract and in tort, with these distinctions-

1. In ascertaining the sum of damages, the court may reasonably consider the purpose with which a tort is committed. In the event of fraud, evidence of intentional intent is admissible. Thus, the court took into account the defendant’s criminal intent in awarding damages in an attempt to dump tainted barley on the plaintiff’s property in order to poison his chickens.
2.  Property losses are visited only with damages proportioned to the real pecuniary injury suffered, where the gist of the action is damage, pecuniary or estimated in money. But if absolute rights are violated, negligible damages are awarded to a complainant not because he has lost anything, but because his rights are absolute. Where the harm is to the person or sentiments, and the evidence show deception, intent, cruelty, etc., the harm is aggravated and the claimant seeks aggravated damages, although they do not carry any proportion to the complainant’s real loss. In a tort suit against the State or its agents, exceptional damages are also permitted if the suit accused of in a tort action or is unlawful and also against a defendant who, by performing the crime, makes a benefit which can surpass the usual fee owed by the defendant. However, for an infringement of a contract, exceptional damages can not be recovered, except in a suit for infringement of the intent of marriage.

Injunction

An injunction is a judicial order prohibiting the commission, reproduction, or continuance, of a defendant’s wrongful act. He must show the presence of either harm or fear of harm in order to entitle a claim of an injunction. The harm detained must have an immediate risk of a serious sort or disability that would be irreparable. A preventive injunction should be issued only if the defendant has infringed or may infringe any civil right or equal right of the complainant and not simply on the grounds that it is unconscionable for him to do what the defendant wants to do. In such circumstances, the court can need to reconcile two rights, e.g. Until agreeing to issue an injunction, a right to privacy and a right to freedom of speech.

An injunction may be granted to prevent waste, trespass, or the continuance of nuisance to dwelling or business houses, to right of support, to right of way, to the highway, etc.; or the infringement of patent rights, copyrights and trademarks; or the publication of trade secrets; or the publication of manuscripts letters, and other unpublished matter.

Damages under Tort refers to a form of compensation due to a violation, damage or accident, in basic terms. 1 Damage may claim defence of “expectation interest,” “reliance interest,” or “restitution interest,” as explained by Fuller and Perdue. Expectation interest (also known as performance interest) refers to putting the plaintiff in a position he would have occupied, if the defendant had fulfilled his promise by compensating for the damage, thus attempting to fulfil the promisee’s expectation; dependency interest (also known as status quo interest) refers to returning the plaintiff to a position he was in for.

Damages is often confused with” damage. It should be known, though, that these two words are significantly different and distinct from one another. Although “damages” refers to the compensation awarded or sought, “damage” refers to the harm or loss that is alleged or awarded for such compensation. ‘Damage’ may be monetary or non-direct (which may apply to monetary benefit in situations where there is a lack of reputation, physical or emotional injury or suffering).

It is notable at this juncture that, in general, losses can be distinguished from rewards. Compensation is a wider definition that covers payments rendered to an entity for any form of loss or harm incurred owing to causes such as possession of the property from another person or regulatory breaches, removal of jobs, seeking compensation by the aggrieved party; moreover, penalties occur from actionable errors.

Damages have gained much significance especially among commercial transactions, and as punitive measures for violation of rights of concerned persons. The nature of damages granted across various areas varies significantly.

For example, it is appropriate to consider the substantial discrepancies between the two in regard to penalties given under indemnity contracts. An indemnity is a form of protection from third-party damages assured by an indemnity arrangement between the claimant (indemnified) and the compensator. A demand for compensation arises from the initial indemnity arrangement, while a claim for damages arises from a breach of contract. The risk of potential losses and responsibility to pay damages transfers to the indemnifier, unlike damages in ordinary contracts where the claimant has the sole liability to pay the damages in arbitration contracts.

Damages are popularly granted in cases of tort or on breach of contract. This paper broadly covers damages in cases of contractual breaches in India, with a brief overview of claim and grant of damages in cases of torts, indemnity contracts, arbitral proceedings, sale of goods, consumer law and intellectual property rights (copyrights, trademarks and patents).                                                 

Two forms of Damages

There are two forms of granting damages; first is Liquidated Damages and the second one is Unliquidated Damages.

Liquidated Damages

Liquidated Damages means those damages which are predetermined. And based on such predetermination the person is given damages. For example, in Contracts, both parties set an amount which either of them would have to pay in case of the breach of contract.

In India, liquidated damages are recognized under Section 73 and Section 74 of the Indian Contract Act, 1872. “Sec. 73 notes that” when a contract has been breached, the aggrieved party is entitled to claim restitution or other harm or injury necessarily incurred on it during the ordinary period of breach of contract or already recognised by the parties to the contract when entering into the contract.

Sec 74 states that ‘If a contract has been broken and whether a sum is specified in the contract as the amount to be paid for the violation, or whether the contract includes some other liability clause, the party complaining about the violation shall be entitled to obtain fair compensation from the party that has violated the contract, whether or not the real damage or injury is found to have been incurred thereby.

The parties themselves may decide how much should be charged in the case of a violation, specifically because penalties are often difficult to determine. Courts will impose a rule of liquidated damages as long as it is impossible to assess the exact amount of harm (in which case testimony of it is simply rendered at trial) and the quantity is fair in terms of the anticipated or exact harm. The surplus is considered a penalty if the liquidated quantity is unreasonably high, which is claimed to be against a public policy which unenforceable. 

Unliquidated Damages

Unliquidated Damages under Tort means those damages which are not predetermined and are based upon the evaluation of loss the person has suffered. Unliquidated Damages are awarded in the case of Torts as both of the parties are unaware of the potential loss’s compensatory equivalence.

For example, A trespassed on B’s property. B caught him and A ran off. There is no predetermined amount that has been fixed for the trespasser. Court will in such cases grant the damages based on the facts.

Damages for the Nervous and Mental Shock

Nervous shock is the onset of a mental illness induced by witnessing another’s careless behaviour or the effects of it. It must be defined as more than sadness or despair, i.e. an actual mental disorder, for the purposes of prevailing in a suit.

Nicholas N Chin says the nervous shock is “..” The name applies to a broad variety of recognised psychological disorders, such as phobic anxiety, neurosis and post-traumatic stress disorder, which are more than just sadness, frustration or unhappiness.

As part of a therapeutic trend after railway crashes, John Eric Erichsen described nervous shock injuries. Many of the railway collisions, Erichsen said, lead to “severe and prolonged” nervous shock, “weariness,” “cramps,” and other symptoms. In Alcock & Others v Chief Constable of South Yorkshire Police, Lords Keith and Oliver feels that the word nervous shock is a “misleading” one,

Since it actually protects a wide variety of possible claims in the area of negligence. Any doubt remains as to whether the courts will reliably assess the degree of a psychological disability in terms of the required level of healing that may or should be awarded. In the 19th Century case of Lynch v Knight, this is seen the statute can not value emotional pain or discomfort and does not claim to cure because the illegal act accused of induces it alone.

Especially in today’s world, where since the time of the Lynch decision rehabilitation on the basis of solely mental disability, there have been so many medical advancements, it should actually be no more difficult than rehabilitation with a physical injury.

Whether the market inflation influence the Damages?

Generally, the market inflation grows with passing years. So does Court takes it as a consideration while awarding Damages? There are two case laws that substantiate the jurisprudence in this matter:

In the case of Jaimal Singh v. Jawla Devi, it was decided that the Court will have to consider the currency valuation and market inflation while deciding the damages.

The court in Kerala State Electricity Board v. Kamalakshy Amma decided that market inflation should be a factor while deciding the compensation. Court also upheld the above-cited case of Jaimal Singh.

FAQs

.