Lloyd's Maritime and Commercial Law Quarterly
USER DAMAGES AND THE LIMITS OF COMPENSATORY REASONING
Alvin W-L See *
The use of the term “user damages” in reference to compensatory damages is particularly problematic because it tends to overgeneralise the cases and conceal the importance of identifying the relevant loss in each case, which has implications on issues of proof, quantification and mitigation. This has contributed to the persistent neglect squarely to address issues of loss, which has in turn led to both over- and underestimation of the limits of compensatory damages. Once we look past the broad label, it becomes obvious that the cases purportedly unified by a common measure of loss tend to vary widely in facts and that the employment of the same measure was often merely coincidental. If the broad label adds nothing but distraction and confusion, it may be time to consider dropping it from our legal vocabulary.
I. INTRODUCTION
A owns a car and B, without permission, takes it for a joyride around the country.1 A week later, B returns the car after a thorough service and with a full tank of petrol. The car is in a better condition than it was before; it did not depreciate in value. Yet, it is generally accepted that A would be entitled to claim from B a reasonable sum for the use of the car.2 Damages assessed on this basis are often referred to as “user damages”.3 The term hints at a restitutionary remedy, as it appears to focus on B’s use of A’s property. This view finds considerable support from the existing academic literature, which has mostly focused on explaining user damages on the basis of restitutionary principles. Certainly, approaching the topic in this manner has its benefits, particularly when confronted with situations where A’s loss is not readily identifiable. However, it is not the intention of this article to engage with the well-trodden discussion on the justification and limits of restitutionary damages. Instead, it seeks to examine the extent to which user damages are explicable by reference to compensatory principles, a topic that has received far
* Assistant Professor of Law, Singapore Management University. I would like to thank my colleagues, Tham Chee Ho, Man Yip, Yeo Tiong Min, Kelvin Low, David Llewelyn, Gary Chan and Goh Yihan for their helpful comments. All errors are my own.
1. For consistency, I shall refer to “A” as the party whose right has been infringed and “B” as the party who has infringed A’s right.
2. For famous dicta to this effect, see The Mediana [1900] AC 113 (HL), 117 (Earl of Halsbury LC); Watson, Laidlaw & Co Ltd v Pott, Cassels and Williamson (1914) 31 RPC 104 (HL), 119 (Lord Shaw of Dunfermline).
3. This was derived from the term “user principle” coined by Nicholls LJ in Stoke-on-Trent City Council v W & J Wass Ltd [1988] 1 WLR 1406 (CA), 1416.
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