Today our fraudulent misrepresentationfraudulent misrepresentation: a statement that is false and ... More solicitors discuss what damagesdamages: in litigation and dispute resolution, financial com... More and compensation may be available to victims.
Fraudfraud: in the context of commercial dispute resolution (as o... More is the most serious type of misrepresentationmisrepresentation: in contract disputes, a false statement t... More and the hardest for claimants to prove. Once fraudulent misrepresentationfraudulent misrepresentation: a statement that is false and ... More is established, how will the successful party’s damagesdamages: in litigation and dispute resolution, financial com... More be calculated by a court? The key points for claimants to bear in mind are set out below.
Damagesdamages: in litigation and dispute resolution, financial com... More for fraudfraud: in the context of commercial dispute resolution (as o... More
Smith New Court Securities v Scrimgeour Vickers (Asset Management) Ltd was a case where a claimant was found to have purchased sharesshares: a unit in a company that quantifies what portion of ... More in a company after being induced by a fraudulent statement. The House of Lords set out a number of principles of calculating damagesdamages: in litigation and dispute resolution, financial com... More for fraudfraud: in the context of commercial dispute resolution (as o... More:
- The defendantdefendant: the respondent against whom court proceedings are... More must make reparations for damage flowing directly from the fraudulent transaction.
- The damagesdamages: in litigation and dispute resolution, financial com... More do not have to be forseeable, but must have been directly caused by the transaction.
- The claimant is entitled to the full price paid in the transaction that was induced by fraudfraud: in the context of commercial dispute resolution (as o... More, but must give credit to any benefits received as a result of the transaction.
- The claimant is entitled to consequential losses flowing from the transaction.
- The claimant must take steps to mitigate the loss once he has discovered the fraudfraud: in the context of commercial dispute resolution (as o... More.
For those looking to quantify their fraudfraud: in the context of commercial dispute resolution (as o... More claims it is worth looking at a couple of these principles in a little more detail.
Damagesdamages: in litigation and dispute resolution, financial com... More directly caused
In approaching damagesdamages: in litigation and dispute resolution, financial com... More for fraudulent misrepresentationfraudulent misrepresentation: a statement that is false and ... More courts will look to award defrauded claimants full compensation for the wrongs they have suffered. Put another way, courts will look to put claimants back in the position they were in had the fraudulent representation never been made. This, in financial terms, would return the losses caused but not provide compensation above and beyond that.
For example, if a claimant was induced by fraudfraud: in the context of commercial dispute resolution (as o... More to buy property worth considerably less than promised, the damagesdamages: in litigation and dispute resolution, financial com... More directly caused would be the difference between the real market value and the amount paid.
Unforeseeable losses
Losses above and beyond those directly caused by the fraudfraud: in the context of commercial dispute resolution (as o... More can also be claimed, even where the loss could not have been foreseen by the defendantdefendant: the respondent against whom court proceedings are... More, so long as the loss is directly caused by the fraudulent misrepresentationfraudulent misrepresentation: a statement that is false and ... More. This is especially useful in cases where a claimant has been induced by fraudfraud: in the context of commercial dispute resolution (as o... More to enter into a contract that is less valuable than the price paid; not only will the difference between what is paid and the actual value be recoverable as damagesdamages: in litigation and dispute resolution, financial com... More, but the claimant will be entitled to compensation for expenditure wasted in reliance on the contract and for other opportunities passed up.
Mitigation and benefit
It is to be remembered that a claimant must take into account the value of any benefit received from the transaction that was induced by fraudfraud: in the context of commercial dispute resolution (as o... More when assessing damagesdamages: in litigation and dispute resolution, financial com... More. So for example any income earned as a result of a contract induced by fraudfraud: in the context of commercial dispute resolution (as o... More must be credited against a claimant’s overall losses.
In addition, on discovering a fraudfraud: in the context of commercial dispute resolution (as o... More, a claimant must take steps to mitigate the damagesdamages: in litigation and dispute resolution, financial com... More caused and cannot claim for losses that could reasonably have been avoided.
You should seek legal advice if you think you have a fraudfraud: in the context of commercial dispute resolution (as o... More claim. Contact our London fraudfraud: in the context of commercial dispute resolution (as o... More and misrepresentationmisrepresentation: in contract disputes, a false statement t... More solicitors for a confidential discussion today.