Complex commercial disputes: Mitigation

In the damages world, we as experts routinely talk about a plaintiff’s “duty to mitigate,” but the concept of mitigation is not something that we see all damage experts consider when preparing a damage calculation on behalf of a plaintiff.

The “duty to mitigate” suggests that a plaintiff should take reasonable steps to avoid or reduce the losses asserted in a matter as a result of the defendant’s conduct. Mitigation is something that counsel and the damage expert should consider early on in an engagement in order to understand opportunities to mitigate, as well as identify information that’s necessary to obtain in discovery to address mitigation properly.

Without proper consideration of mitigation, a seemingly sound damage calculation can be at risk if the expert fails to consider the steps that the plaintiff could have taken to mitigate its losses.

Some important considerations when evaluating mitigation include:

  • What steps constitute reasonable mitigation?
  • Could the defendant have mitigated as easily as the plaintiff?
  • Can losses be mitigated in part or in their entirety?
  • What information is necessary in discovery – for example, documentary evidence of communications with alternative suppliers, deposition testimony regarding specific steps taken to mitigate losses, etc.?

It is well recognized that the plaintiff should take reasonable steps to mitigate its losses. However, the quantification of mitigation can be complex depending on the facts and circumstances of a case.

Mitigation is something that counsel and the damage experts should consider early on in an engagement, because failure on the part of the plaintiff’s expert to consider mitigation will be something that the defendant’s expert will address it in rebuttal.

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