Mitigating damages is a legal duty you may have to uphold. Typically, you have a right to be compensated for your losses if someone else caused them. However, you must take reasonable steps to minimize those losses. This duty arises most often in personal injury and contract cases. Defendants do not have to compensate you for losses you did not try to prevent.
Mitigation of damages
Mitigation of damages is a defense that can be used in certain types of lawsuits. In raising it, the defendant, or the person being sued for causing harm to the victim, argues that he or she is not responsible for certain losses the victim sustains. This defense creates a legal duty for victims to take reasonable steps to mitigate their losses.[1]
If the defendant can show that the plaintiff failed to uphold that duty, then the defendant would not have to pay for the avoidable losses.
The defense is most common in the following types of cases:
- tort cases, also known as personal injury claims,
- breach of contract disputes, and
- real estate issues.
The defense is also known as the doctrine of avoidable consequences.
In personal injury cases
The injured party in a personal injury claim has to mitigate their damages. These personal injury claims include those that follow:
- car accidents,
- slip and fall accidents, and
- medical malpractice.
The classic and real-life example is a car accident victim refusing medical treatment that went against his religious beliefs and dying from his treatable injuries.[2] According to the court that heard the wrongful death case:
“If the injuries are such that a reasonably prudent man would seek medical care, such care must be secured.”[3]
Other examples include when:
- an instance of medical malpractice caused the victim to suffer facial paralysis, but she did not go to physical therapy to alleviate the condition,[4]
- a worker who hurt his eyes at work did not follow his doctor’s orders to wear special glasses, making his condition worsen,[5] and
- a slip and fall victim who was cleared to return to work at light duty refusing to do so.
In these cases, it was the victim’s decision that led to their losses, whether they were worsening medical conditions or lost wages. Because the defendant did not cause them, it would be unfair to make them pay for it.
In contract disputes
If one party to a contract breaches the agreement, the non-breaching party has a duty to mitigate its damages under contract law.
For example: A nursery hires a contractor to do irrigation work for its plants. The contractor botches the work and destroys the pipeline, causing $17,000 in losses from the plants dying. However, the nursery could have spent $600 to get water from another source, but chose not to. In the resulting breach of contract case, the nursery was found to have failed in its duty to prevent further loss.[6]
In real estate issues
The doctrine of avoidable consequences can also come up in real estate law, particularly landlord/tenant law. Two common scenarios of what mitigating damages means in this context are:
- when a tenant leaves an apartment before the lease is over, the landlord has a duty to promptly find a new tenant, and
- when a homeowner or developer hires a contractor to remodel or build a house but the contractor does not finish the job, there is a legal duty to take appropriate steps to keep the situation from getting worse.
Reasonable steps required
What reasonable steps are required to satisfy your duty to mitigate your damages will depend on the case. However, it is enough if you act like a reasonable person, with due diligence, common sense, and in good faith. If you take reasonable efforts to mitigate your losses, but those efforts prove to be ineffective, you will have still satisfied your legal duty. You also are not required to take impractical measures or do what is beyond your financial means.[7]
Some common examples of the measures that satisfy your duty to mitigate your losses are:
- getting medical attention after an accident and following your doctor’s orders,
- returning to work when cleared to do so, and
- initiating communications with the party that is not performing under the contract and, if it becomes clear that they will breach the agreement, finding a replacement before losses mount.
The personal injury lawyers at our law firm have found that the main thing to avoid is throwing your hands up and letting things get worse unabated. If you do this, then the defendant can claim that it was your failure to act that caused your losses, not their own conduct. If the defendant succeeds in this argument, they will not have to compensate you for the losses that could have been avoided. You would then have to deal with the consequences of your failure to minimize your losses without financial compensation.
Affirmative defense by defendant
The doctrine of avoidable consequences is an affirmative defense. It is up to the defendant to raise it and prove it.[8]
Purpose of the rule
The duty to mitigate damages ensures that the defendant is only made to compensate you for the losses that they caused. Your failure to mitigate your losses is out of their hands, so it would be unfair to hold them accountable for it.
Additionally, if there were no such duty then victims could let things get worse and then try to collect a windfall.
Legal Citations:
[1] See California Civil Jury Instructions (CACI) No. 3930.
[2] Christiansen v. Hollings, 44 Cal.App.2d 332 (1941).
[3] Same, at 346.
[4] Lemons v. Regents of University of California, 21 Cal.3d 869 (1978).
[5] Cody v. State of New York, 82 A.D.3d 925 (2011).
[6] Facts from Green v. Smith, 261 Cal.App.2d 392 (1968).
[7] Same, at 397.
