Canada: Duty To Mitigate

Mitigation is a common law doctrine based on fairness and common sense. As a general rule, a plaintiff will not be able to recover losses that could have been reasonably avoided.1

While a plaintiff bears the burden of proving the fact that he has suffered a loss and the quantum of that damage, the defendant bears the onus of proving, on a balance of probabilities, that:

  1. the plaintiff has failed to make reasonable efforts to mitigate and;
  2. that mitigation was possible.2
 

That doctrine of mitigation has been clearly stated in Red Deer College v. Michaels, [1976] 2 S.C.R. 324, where Laskin C.J. said, at p. 331:

If it is the defendant's position that the plaintiff could reasonably have avoided some part of the loss claimed, it is for the defendant to carry the burden of that issue, subject to the defendant being content to allow the matter to be disposed of on the trial judge's assessment of the plaintiff's evidence on avoidable consequences.3

Requirements to Mitigate

The general rule is that a plaintiff bears no obligation to mitigate, however, damages can be reduced if the plaintiff failed to take reasonable steps to mitigate his losses.4 For instance, the duty for mitigation may not apply when the injured party does not have the financial resources to reduce the damages.

A party that unreasonably fails to mitigate their losses reduces the quantum of damages to the extent that mitigation would have avoided the loss.5 For instance, if the plaintiff's actions partially avoided the loss, then a partial reduction of the damages is justifiable. If the plaintiff takes reasonable steps to mitigate his losses, he may recover the costs and expenses incurred in mitigation of damages.

The valuation of damages is, therefore, a “balancing process” as the Federal Court of Appeal stated in Redpath Industries Ltd. v. Cisco (The): “The Court must make sure that the victim is compensated for his loss, but it must at the same time make sure that the wrongdoer is not abused.”6

The requirement to take steps to mitigate losses is one such responsibility and it is argued by a party seeking justice in the particular circumstances of the case.

Mitigation in Property Damage Claims

The plaintiff's duty to mitigate can apply to events leading up to the loss and post-loss depending on the circumstances of each case. In any event, the general principle is that the duty to mitigate applies to claims for breach of contract and tort.

A plaintiff's duty to mitigate damages in tort or breach of contract cases was further explained by Justice Wilson in Janiak v. Ippolito, [1985] SCJ No. 5 (QC) at para 33:

The principle to be applied with respect to the mitigation of damages in the case of tort is clear. The plaintiff is "bound to act not only in his own interests, but in the interests of the party who would have to pay damages, and keep down the damages, so far as it is reasonable and proper, by acting reasonably in the matter". "If any part of his (the plaintiff's) damage was sustained by reason of his own negligent or unreasonable behaviour, the plaintiff will not be recouped as to that part." However, "the question what is reasonable for the plaintiff to do in mitigation of damages is not a question of law, but one of fact in the circumstances of each particular case, the burden of proof being upon the defendant". The authorities show that once the plaintiff has "made out a prima facie case of damages, actual or prospective, to a given amount", the burden lies upon the defendant to prove circumstances whereby the loss could have been diminished. Not only must the defendant discharge the onus of showing that the plaintiff could have mitigated his loss if he had reacted reasonably, but he must also show how and to what extent that loss could have been minimized.7

In summary, the obligation of a plaintiff is to act prudently and take the reasonable steps to not create additional damages. However, the plaintiff is not required to take extraordinary steps or all possible steps to mitigate the loss.

I. Pre-Loss Events

In contract and tort actions, failing to mitigate signifies that a party has not taken the necessary actions to prevent additional damage to its property. For example, what often starts as an undetected leak can quickly spread throughout the property and make detection extremely difficult. To mitigate losses, the homeowner should be taking steps for early detection.

Mitigating in property damage actions can be a simple as removing fallen trees or branches from your property, covering damage parts of your property with tarps to prevent further damages, turning off your electricity to prevent a fire, turning off your water to stop a leak, drying out your home, etc. Depending on the extent of damage, you may need to retain a plumber, engineer, electrician, restoration company, contractor or other professionals in order to mitigate those losses.

In addition, basic maintenance can also prevent a loss and reduce damages. For example, if you have an old tree in your backyard, one you know that has a disease or is dead, and it falls on your neighbour's house, you could be liable for the damages caused because you did not mitigate, or prevent damage, by removing the tree before it fell.

In the case of defective workmanship, consideration should be given to any parties who had an obligation to inspect such workmanship. This can include architects or engineers, construction managers, municipal inspectors, administrative authorities, etc. Although these parties often had no part in directly causing the loss, they may have been in a position to discover the defective workmanship which ultimately caused the failure, and can be held liable for this.

II. Post-Loss

After a loss has occurred, a number of parties are responsible for mitigating the loss, such as emergency and security personnel, and those responsible for automatic mitigation systems such as sprinklers. In the event that the immediate response to the loss is not as effective as expected, there may be available avenues to pursue these parties for failure to properly respond to the loss. While actions as against emergency services such as fire departments can be difficult to succeed in, actions as against security companies, and parties responsible for the design and construction of fire suppression systems can be very lucrative. Unfortunately, this class of subrogation target will often not be held liable for the full extent of the loss, as they ultimately did not cause it. However, when more direct targets are not available, or have insufficient insurance coverage, pursuing these targets can greatly increase the recovery potential.

The Claims Adjuster's Duty to Mitigate

It is fair to say that everyone has a common law duty to mitigate their damages following a property loss. The duty to mitigate is also extended to claims adjusters following a loss.

The initial investigation following a loss is crucial. Mitigation requires for an adjuster to take the necessary steps to secure emergency and restoration services immediately after a loss and these services must be performed at an effective cost rate. When a fire loss or water loss occurs, immediate and appropriate action will help reduce further damages to the property and facilitate an efficient return to normalcy.

A defendant can reduce damages of the action by arguing that the plaintiff and the claims adjuster did not act promptly and reasonably in attempt to mitigate damages following the loss. The duty to mitigate following a loss can extend to the duty to effectively analyze the cause of the loss, providing prompt and accurate repairs services to a property and effectively monitoring and adjusting the claim.

Conclusion

We must keep in mind that if a claim appears excessive, a defendant will likely blame the insurer for running up unnecessary costs and the Court may reduce the quantum of damages if they could have been reduced or prevented.

There is no formula that can be used to assess the duty to mitigate in every matter. In any event, it is important to consider mitigation and how it might be applied to the circumstances of each case in order to assess how damages might be awarded.

Footnotes

1 Asamera Oil Corp. v. Sea Oil & General Corp., [1979] 1 S.C.R. 633, at p. 660.
2 Southcott Estates Inc. v. Toronto Catholic District School Board, 2012 SCC 51, [2012] 2 S.C.R. 675, p.4.
3 Janiak v. Ippolito, [1985] SCJ No. 5 (QC) at para 32
4 Janiak v. Ippolito, [1985] 1 S.C.R. 146, at pp. 166-67; Darbishire v. Warran, [1963] 1 W.L.R. 1067 (C.A.), at p. 1075.
5 Andros Springs v. World Beauty, [1970] P. 144 (C.A.), at p. 154 (per Lord Denning)
6 [1994] 2 F.C. 279, at p. 302
7 Janiak v. Ippolito, [1985] SCJ No. 5 (QC) at para 33 ( quoting Buczynski v. McDonald (1971), 1 S.A.S.R. 569, Walters J., at p. 573)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions