Negotiating damages for contractual breach
Negotiating damages for contractual breach

The following Dispute Resolution practice note provides comprehensive and up to date legal information covering:

  • Negotiating damages for contractual breach
  • What are ‘negotiating damages’?
  • The decision in Wrotham Park v Parkside Homes
  • The House of Lords decision in Blake (gains-based damages)
  • The attempts to extend the award of negotiating damages (Lord Reed’s ‘second phase’)
  • Morris-Garner v One Step—Supreme Court clarifies the availability of ‘negotiating damages’
  • Negotiating damages—are post-assessment events relevant when assessing the damages?

This Practice Note considers what ‘negotiating damages’ (previously sometimes known as Wrotham Park damages) are, when they may be available as a remedy for contractual breach and what the court will take into account when assessing them.

For guidance on the remedy of damages, see Practice Note: The remedy of damages—general principles.

For guidance on the general principles for claiming damages for contractual breach and the distinction between claiming for pecuniary and non-pecuniary losses, see Practice Notes:

  1. Contractual damages—general principles

  2. Contractual damages—pecuniary losses

  3. Contractual damages—non-pecuniary losses

What are ‘negotiating damages’?

Negotiating damages are damages which are assessed by reference to the sum that the claimant could reasonably have charged for releasing the defendant from the obligation which the latter failed to perform (the hypothetical release). This is in contrast to the general compensatory nature of contractual damages which entails an assessment of the loss actually caused by reference to the difference between the claimant’s actual position and the position he would have been in had the contract been performed.

‘Negotiating damages’ is a relatively new term—Lord Reed in Morris-Garner v One Step propounded its use for that category of cases where damages can be awarded for breach of contract where the loss suffered by the claimant is appropriately measured by reference to the economic value of the right which has been breached, considered as an asset. That may be

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