NEW RULE CHANGES: THE RULES WILL NOW GET IT RIGHT ON PLEADING MITIGATION OF LOSS: A SMALL CHANGE THAT TOOK FAR TOO LONG
The 113th update to Practice Direction Amendments makes a small but important change to the rules relating to mitigation of loss. In short it puts the position right and stops the Practice Direction being the shambles it was before. This change is long overdue. coming 21 years too late. The obligation on a claimant to plead facts relating to mitigation was most probably introduced by error in the first place, it directly contradicted what was said in the Woolf report about pleading.
The change is to Practice Direction 16.
“In paragraph 8.2(8), for “mitigation of loss or damage” substitute “a claim for
THE OLD RULE
This only makes sense if you consider the existing rule which puts the burden on a claimant to plead “(8) any facts relating to mitigation of loss or damage.”
THE OLD RULE WAS ALWAYS NONSENSE
The burden of proof in establishing a failure to mitigate loss lies on the defendant. In Zurich Insurance Plc -v- Umerji  EWCA Civ 357 the Court of Appeal observed, in a note to the judgment, that
“Para. 8.2 (8) of the Practice Direction reads rather oddly in the light of the well-established principle that the burden of proof on the issue of mitigation is on the defendant (see McGregor on Damages, 18th ed., para. 7-019); and we were told by both counsel that in this field it is not generally observed. I can see that it is hard on a claimant to expect him to anticipate and rebut points made about avoidable loss: it seems obviously preferable that he should plead his primary loss, wait and see what criticisms are made, and then if necessary plead to those criticisms by way of ReplyBut the position is different in the case of a claim for expenditure reasonably incurred in mitigation of the primary loss. In such a case the claimant should plead his case as to reasonableness, including any assertion of impecuniosity: see para. 37 below”
The “old” rule didn’t help claimants or defendants. It put claimants in an impossible position, it often led to defendants overlooking the point that the legal burden rested on them to prove mitigation of loss.
IT HAS TAKEN SOME TIME TO PUT THIS RIGHT
Six years after the Zurich case this position has now been put right. In the interim (and before that) I have not been over-polite about this rule which, on its face, attempted to reverse the legal principles involved.
(Here is what I wrote in the Solicitors Journal in June 2003 on this very issue:
This is what I wrote in 2019