Lloyd's Maritime and Commercial Law Quarterly
WRONGFUL DISHONOUR OF CHEQUES: GENERAL OR SPECIAL DAMAGES
Rae v. Yorkshire Bank plc
One defect of any legal system that embraces strict adherence to judicial precedent is that it encourages courts to impress, retrospectively, legal coherence upon reported cases containing significantly dissimilar facts and yet espousing apparently congruous principles. The recent case of Rae v. Yorkshire Bank
1 provides a good illustration of how this predisposition can create supposedly unimpeachable legal precedents based on dubious authority, which subsequent courts may follow without demur.
On the facts, the Court of Appeal decided that the wrongful dishonour of a cheque by the defendant bank constituted a breach of an implied contract to grant increased overdraft facilities to the plaintiff customer. However, Parker, L.J. (with whom O’Connor, L.J., concurred) awarded only nominal damages as there was no evidence of special damage and no authority for awarding general damages in such cases. Moreover, if available, general damages could not encompass inconvenience and humiliation.
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