Mitigating losses when making a personal injury claim

When making a claim for personal injury, the injured party may not be aware that they have a duty to mitigate their losses. In layman’s terms, this means doing all that you possibly can to reduce both your recovery time and any financial losses that flow from the accident.

General damages represent the compensation for pain and suffering and loss of amenity. In addition, claimants are entitled to be awarded special damages for any financial losses that they can prove have resulted from the accident.

What does mitigating losses mean?

Claimants are required to ensure that they take reasonable measures, where possible, to keep their financial losses at a reasonable level, if not to a minimum, following an accident. In addition, they are expected to do all that they possibly can to recover from their injuries in the quickest time possible.

This is why it is so important for a claimant to fully engage with rehabilitation as soon after their accident as possible. In the claims we deal with at Anthony Gold Solicitors, which involve very serious and often life-changing injuries, early intervention is crucial to facilitate the best recovery possible. Whilst we will always aim to get a rehabilitation case manager on board early on in the process to report on our client’s most pressing rehabilitation needs, there is also an expectation that the claimant will continue to pursue all appropriate treatment through the NHS, whether that be via their treating NHS hospital or their GP.

If a claimant does not fully engage with their rehabilitation, does not attend NHS appointments or refuses to take up an offer of rehabilitation being funded by the defendant, the defendant will be able to argue that the claimant has not mitigated their losses. Consequently, they will be able to argue that their pain, suffering and loss of amenity has lasted longer than it otherwise would have done and that their general damages should be reduced to reflect this. In such instances, the defendant would have a very strong argument and with general damages being valued on the basis of recovery and the prognoses of the appropriate medical experts in the case, if that recovery has taken much longer due to the claimant not mitigating their losses, their damages will be at a significant risk of being reduced.

By the same token, if a claimant has not reasonably done all that they possibly can to limit their financial losses following an accident, then the judge could also reduce their claim for special damages. This is particularly pertinent to a loss of earnings claim (see below for further details).

Reasonableness is the guiding principle that the Courts follow when deciding whether the claimant has satisfactorily mitigated their losses. All that is required is that you, as a claimant, take reasonable steps to reduce your losses and follow the aim of compensation, which is to put you back in the position you were prior to the accident, not to put you into a better position and one that you would never have been in.

What happens if I do not mitigate my losses?

If the claimant does not take reasonable steps to minimise loss, any claim brought for damages may be reduced as a result.

The ethos behind mitigation in this context is to encourage claimants to actively engage in their rehabilitation to do all that they can to recover from their injuries as quickly as possible, as well as doing all that they can to limit their financial losses.

For example, if a claimant has been seriously injured and has been left unable to work, a judge is going to want to see evidence that the claimant has done all that they reasonably and practicably could to get back to work as soon as their recovery allows. If a judge feels that the claimant could have returned to work much sooner than they did, subject to this being supported by the medical expert evidence, then they will have discretion to reduce the claimant’s claim for loss of earnings.

If we were to consider a claimant earning £50,000 per annum who has been off work on no pay for 2 years following their accident, that would equate to a loss of earnings claim of £100,000. If the medical evidence obtained for the claim suggests that the claimant should have been able to return to work after one year, but there is no evidence that they made any effort to do so, that would eradicate £50,000 from the loss of earnings claim, as the judge will only award the loss for the first year that the medical evidence says the claimant was justifiably off work.

In respect of general damages, if a claimant’s injuries, prognosis and condition suggest that their claim is valued at £20,000 but they have not fully engaged with their rehabilitation, have ignored doctor’s advice or the recommendations of the medical experts in the case and are deemed to have therefore not mitigated their losses, a judge might decide to reduce this to £10,000.

These figures are not taken from any case Anthony Gold has dealt with and are simply provided to demonstrate the point, but they do show how much your claim can be adversely affected if you are not aware of your duty to mitigate your losses and cannot show that you have done so.

What does the court reasonably expect?

If your car was badly damaged and cannot be driven, hiring an expensive car is not reasonable, especially if you have another vehicle or if your insurance is providing you with a courtesy car.

Medical treatments and loss of earnings are two areas of personal injury litigation that regularly give rise to arguments over mitigation of loss.

When medical treatment is recommended by the independent medical examiner which is likely to improve the claimant’s condition and the claimant unreasonably decides not to undergo the treatment, the insurers may take advantage of the claimant’s decision and seek to argue that the claimant has failed to mitigate.

Subject to liability not being an issue, the claimant’s solicitor may arrange for the treatment on a private basis, but if this can’t be done, then the claimant must proactively follow up with the NHS to ensure that all appointments are arranged and attended.

In respect of loss of earnings, there are situations where the claimant cannot return to work for a prolonged period of time or the injury is so severe that it prevents the claimant from returning to their pre accident employment. In such cases, the judge will expect the claimant to have tried to get back to work, tried to find alternative work, retrained or requalified to do something else. Any claimant who cannot evidence that they have done any of this will be at a significant risk of being deemed to have not mitigated their losses and having their damages reduced accordingly.

In conclusion, when making a claim for personal injury, the claimant should ensure that the claim is proportionate and reasonable. The purpose of the compensation is to put the claimant in the position they would have been if the accident had not occurred, not in a better position than they were prior to the accident.

Claimants must therefore always be aware of the need for them to make a reasonable effort to reduce their losses.