- Causation and mitigation in breach of contract claim—spread betting (Ehrentreu v IG Index Ltd)
- What are the practical implications of this case?
- What was the background?
- What did the court decide?
- Case details
Dispute Resolution analysis: The court held that it would require ‘very clear express words in the contract’ spelling out a contractual duty to protect a customer from inflicting economic harm on himself before the court could conclude that ‘such an exceptional duty’ arose. The decision of the appellant to remain in the relevant ‘market’ and leave his spread-bets open was a deliberate choice on his part, independent of any breach by the respondent (a spread betting company). Whether analysed in terms of causation or failure to mitigate, which the court considered to be ‘two sides of the same coin’, it was that decision, not any breach by the respondent, which caused the loss. The respondent had not assumed responsibility for the risks of continuing speculation by the appellant. The Court of Appeal accordingly dismissed the appeal, stating that there had been ‘no error in the judge concluding…that the appellant had wholly failed to mitigate his loss for the same reasons as he had concluded that it was the appellant’s decision to continue to leave his bets open which was the cause of the loss’. Written by Christopher Humby, Senior Associate at Quinn Emanuel Urquhart & Sullivan, LLP
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