Plaintiff’s Duty to Mitigate Loss: Understanding the Implications

Dec 21, 2023 | Publication

In the realm of legal disputes, the principle that plaintiffs have a duty to mitigate their losses holds paramount importance.

The fundamental premise is clear: if a plaintiff’s inaction or unreasonable action leads to avoidable loss, the compensation awarded may be adjusted accordingly. In simpler terms, if a plaintiff fails to take appropriate steps to mitigate their damages, the court may assess their compensation based on the assumption that these mitigative measures were taken.

However, determining what constitutes “unreasonable” action or inaction is not always straightforward. A pivotal case, ECS Group (Australia) Pty Ltd v Hobby [2014] NSWCA 193, offers valuable insights into this aspect. The court, in this instance, drew from the established test in Fazlic v Milingimbi Community Inc [1982] HCA 3, which mandates that the reasonableness of a refusal to seek treatment hinges on the plaintiff’s state of knowledge at the pertinent time.

This means that the plaintiff’s previous experiences, coupled with the specifics of the treatment they declined, play a crucial role in determining the reasonableness of their decision. For instance, if a plaintiff had valid reasons, based on past experiences or medical advice, to forego a particular treatment, their refusal may not be deemed unreasonable.

In conclusion, while plaintiffs have the right to seek compensation for their losses, they are concurrently entrusted with the responsibility to act reasonably in minimising these losses. As the legal landscape evolves, it remains essential for plaintiffs and their representatives to be well-versed in the intricacies of the duty to mitigate, ensuring that justice is served equitably and effectively.

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