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Mitigation of Damage: A French Perspective

Published online by Cambridge University Press:  17 January 2008

Solène Le Pautremat
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Extract

‘Nothing ventured, everything gained!’ is an apt summary of the position recently adopted by the French Cour de Cassation towards the subject of mitigation of loss. In two seminal judgments of 19 June 2003,1 the French supreme court2 explicitly rejected the introduction of a general principle of mitigation in the French law of tort, thereby departing from the solutions reached in England and other neighbouring legal systems.

Type
Shorter Articles, Comments and Notes
Information
International & Comparative Law Quarterly , Volume 55 , Issue 1 , January 2006 , pp. 205 - 218
Copyright
Copyright © British Institute of International and Comparative Law 2006

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References

1 Cass 2ème civ (19 June 2003) No 930 FS-PBRI, Xhauflaire c/Decrept and No 931 FS-PRBI, Dibaoui c/ Flamand, Bull Civ II No 203, D 2003 Jur 2396; Petites Affiches 2003, No 208, 16, noted by Reifegerste; RTD Civ 2003 No 4, 716, noted by Jourdain; Gaz Pal( 8–9 Oct 2003) No 281, 9, noted by Rosenfeld and Bouchez; Répertoire Defrenois 2003, No 23, 1566, noted by Aubert; Droit et Patrimoine (2003) No 120, 82, noted by Chabas; D 2003, No 34, 2326, noted by Chazal; JCPG (2003) No 45 (1933) noted by Castets-Renard; Petites Affiches 2003, No 261, 17, noted by Dagorne-Labbe; Responsabilité Civile et Assurances (2004) No 1, 6 noted by Agard; RJDA( 4 Apr) noted by Aubert, 355.

2 In civil, criminal, and commercial matters.

3 McGregor, McGregor on Damages (Sweet & Maxwell London 2003) 216–17; Chitty on Contracts (Sweet & Maxwell London 2004), I, 1478; Bridge ‘Mitigation of Damages in Contract and the Meaning of Avoidable Loss’ (1989) 105 LQR 398.Google Scholar

4 Nicholas, French Law of Contract (2nd ednClarendon Press Oxford 1992) 231–2.Google Scholar

5 See Cass civ (20 Dec 1966) D 1967, 169; Recently, Cass 2ème civ (23 Jan 2003) Bull Civ II, No 20; Cass 1ère civ (25 Mar 2003) Bull inf.

6 Domat Les Lois Civiles dans leur Ordre Naturel Paris Rollin et fils (1745), T I, Livre III, Titre V, Section III, Para 162.

7 Pothier Traité des Obligations T III, para 162. See also the support of Demogue at the beginning of the 20th century in Traité des Obligations en Général T IV.

8 Michaud ‘Mitigation of Damage in the Context of Remedies for Breach of Contrat’ (1984) RGD 293, 338; Hanotiau ‘Régime Juridique et Portée de l'Obligation de Modérer le Dommage dans les Ordres Juridiques Nationaux et le Droit du Commerce International’ Revue de Droit des Affaires Internationales (1987), 393, 398; Laude, Colloque ‘Faut-il Moraliser le Droit Français de la Réparation du Dommage?’, Centre de Droit des Affaires et de Gestion, Faculté de Droit de Paris V (21 Mar 2002) Petites Affiches No 232, 55.

9 Art 1760 of the Civil Code.

10 Art L172-23 of the Insurance Code.

11 Art 75 and 77 of the United Nations Convention on Contracts for the International Sale of Goods (1980), into force in France since 1988.

12 Nicholas (n 4) 231–2.

13 ibid.

14 Court of Appeal of Montpellier (9 Dec 1965) D 1967, 477, noted by Azard.

15 Cass crim (3 July 1969) JCP 1970 II 16447, noted by R Savatier; RTD Civ 1969 782, obs Durry; Cass Crim (30 Oct 1974) D 1975 178, noted by Savatier; JCP 1975 II 18038, obs Mougeon; RTD Civ 1975. 713, obs Durry. But see Cass 2ème civ (19 Mar 1997) Bull Civ II, No 86; RTD Civ 1997 675, obs Jourdain, in which the Cour de Cassation affirmed that, pursuant to Art 16-3 of the Civil Code ‘except as provided by law, no one can be forced to undergo a surgical operation’.

16 Court of Appeal of Versailles (26 Nov 1986) Gaz Pal 1987, 2, somm 402.

17 Court of Appeal of Paris (22 June 2001) D 2002, 843, noted by Coulon.

18 See, eg Michaud (n 8) 311, who argued that the concept of mitigation was part of the doctrines of dommage direct and préjudice réparable in civil law.

19 Note that French commentators have argued that the duty to mitigate has also been applied on the basis of the theory of the acceptance of risks (théorie de l'acceptation des risques) in Court of Appeal of Douai (15 Mar 2001) JCP ed Ent 2001, 1861, noted by Pédamon; D 2002, 307, noted by André; RTD Civ 2002, 296 noted by Mestre and Fages. It is submitted that this is not the case as the factors taken into account by the court to limit the award of damages pre-dated the loss.

20 Harris, and Tallon, Contract Law Today (Clarendon Press Oxford 1989) 293.Google Scholar

21 Court of Appeal of Bourges 29 Mar 2000 1ère Ch.

22 ‘Attendu que l'auteur d'un accident est tenu d'en réparer toutes les conséquences dommage-ables; que la victime n'est pas tenue de limiter son préjudice dans l'intérêt du responsable.’

23 Cass 2ème civ (19 June 2003) No 931 FS-PRBI, Dibaoui c/ Flamand, Bull Civ II No 203, D 2003 Jur 2396.

24 Court of Appeal of Amiens 4 Nov 1999 (1ère Ch Civ).

25 (n 22).

26 Cass 2ème civ (19 June 2003) No 930 FS-PBRI, Xhauflaire c/Decrept, D 2003 Jur 2396.

27 Cass 2è;me civ (4 Feb 1982) JCP 1982 II 19894, noted by Barbiéri.

28 On the style of judgments in France, see Bell, French Legal Cultures (Butterworths London 2001) 70.Google Scholar

29 Muir-Watt ‘La Modération des Dommages en Droit Anglo-américain’; Colloque ‘Faut-il Moraliser le Droit Français de la Réparation du Dommage?’ Centre de Droit des Affaires et de Gestion, Faculté de Droit de Paris V (21 Mar 2002) Petites Affiches No 232, 45.

30 On this point see Rosenfeld and Bouchez (n 1); Aubert (n 1); Jourdain, ‘Rapport Introductif’, Colloque ‘Faut-il Moraliser le Droit Français de la Réparation du Dommage?’ Centre de Droit des Affaires et de Gestion, Faculté de Droit de Paris V (21 Mar 2002) Petites Affiches No 232, 1.

31 On this point see Rosenfeld and Bouchez (n 1); Aubert (n 1).

32 Chazal (n 1); Dagorne-Labbe (n 1); Gautier ‘Contre Betham: L'Inutile et le Droit’, RTD Civ (1995) 824.

33 Gautier (n 32); Viney ‘Rapport de Synthèse’ in ‘Faut-il Moraliser le Droit Français de la Réparation du Dommage?’ Centre de Droit des Affaires et de Gestion, Faculté de Droit de Paris V (21 Mar 2002) Petites Affiches No 232.

34 Rosenfeld and Bouchez (n 1); Chabas (n 1) 82–3. See Gazette du Palais (24 Aug 2000) in which Professor Chabas remarked, ‘un mouvement continu projette la nébuleuse du droit de la responsabilité vers un point oméga: la faveur de la victime’.

35 By reference to Art 1384, al 1 of the Civil Code.

36 Blieck case, Cass Ass Plen (29 Mar 1991) D 1991, 324, noted by Larroumet, Gaz Pal (1992) 513, noted by Chabas, JCP 1991 II 21673, concl Donrenwille, noted by Ghestin, RTD civ (1991) 312, obs Hauser, obs Jourdain; Foyer Notre Dame des Flots case, Cass Crim (26 Mar 1997) Gaz Pal (1997) 2 Ch Crim, 151; for parents, Bertrand case (19 Feb 1997) D 1997, 265, noted by Jourdain, D (1997) Somm 190, obs, Mazeaud Gaz Pal (1997) 572, noted by Chabas JCP (1997) II 22848, concl Kessous and noted by Viney.

37 Cass Civ 11 June 1896, S 1897, noted by D Esmein 1987, 1, 433, noted by Saleilles and concl Sarrut; Jand'heur Case, Cass Ch Réunies, 13 Feb 1930, rapport Le Marc'hadour, concl Matter and noted by Ripert, S 1930, 1, 121 and noted by Esmein, Gaz Pal (1930) 1, 393 and concl Matter.

38 On the authority of case law in France, see Bell (n 28) 66–72.

39 Aubert (n 1).

40 The decisions were published in the Bulletin mensuel, the Bulletin d'information and the Rapport annuel de la Cour de Cassation. On the indicators used to determine the importance given to a decision of the Cour de Cassation, see Bell (n 28) 67–8.

41 Tort principles were modeled at least in part on the codified principles of contract; See Aubert (n 1); See also Chazal (n 1).

42 Art 1149 of the Civil Code provides that damages are due to the creditor for the loss suffered and the profit he has been deprived of.

43 See, eg Court of Appeal of Paris (22 June 1987) D (1987) IR 178 in which the court held that where the buyer of goods had not accepted the order as agreed, the seller could ask for damages rather than specific performance of the said order.

44 Pursuant to Art 1184, al 2 of the Civil Code for bilateral contracts. See Art 1142 of the Civil Code which is subject to the limitations of Arts 1143 and 1144 of the Civil Code for the ‘obligation de faire’ and ‘obligation de ne pas faire’.

45 See Art 1144 of the Civil Code. See also Art 1143 which deals with orders of judicial destruction of things made in contravention of obligations not to do.

46 Pursuant to Art 1184, al 2 of the Civil Code for bilateral contracts. Note that the court has a discretion to terminate the contract and may declare it subsisting and award damages only or grant the party in breach more time to perform (Art 1384, al 3). There is no need to go before a court to claim termination for non-performance if there is an express contract term which gives the innocent party the right to terminate the contract (clause résolutoire).

47 Muir-Watt (n 29); Parry, , The Sanctity of Contracts in English Law (Stevens & Sons London 1959) 5–8. Michaud (n 8) 337.Google Scholar

48 Laithier, ‘The French Law of Remedies for Breach of Contract’ in Cohen, and McKendrick, (eds) Comparative Remedies for Breach of Contract (Hart Publishing Oxford 2005) 114–16.Google Scholar

49 Muir-Watt (n 29).

50 Art 46(1) of the United Nations Convention on Contracts for the International Sale of Goods (1980).

51 Art 62 of the United Nations Convention on Contracts for the International Sale of Goods (1980).

52 The irrelevance of the principle of mitigation to the choice of remedies is evident in that the only sanction for the failure to mitigate is a reduction of damages and a proposal during the preparatory works to conclude the second sentence of Art 77 of the Convention (which addresses mitigation) with ‘for a corresponding modification or an adjustment of any other remedy’ was defeated.

53 On this point see Colloque Witz ‘Faut-il Moraliser le Droit Français de la Réparation du Dommage?’ Centre de Droit des Affaires et de Gestion, Faculté de Droit de Paris V (21 Mar 2002) Petites Affiches No 232, 50; Heuzé La Vente Internationale de Marchandises, Traité des Contrats, sous la direction de Jacques Ghestin LGDJ (2000) 405. Note the remarks of Honnold in Uniform Law for International Sales (Kluwer Deventer 1999) 460–2 that there is scope for conflict between the obligation of the victim of a breach of contract to mitigate his loss and his right to require specific performance. He argues however that such instances will be rare and that ‘the appropriate response is to adopt the solution that does the least violence to either principle’. In the same vein, Witz observes that in certain cases such as anticipatory breach of contract, whilst the innocent party has a theoretical choice as to whether to avoid the contract, he will, in practice, have to avoid it and find a replacement if he does not want to stand accused of having acted unreasonably by a court. In White and Carter (Councils) Ltd v McGregor [1962] AC 413 Lord Reid specifically closed the door to such an argument insofar as English law is concerned, stating that the court would not support any attempt to subject the enforcement of contractual rights to a test of reasonableness.

54 Criticized by Treitel, Remedies for Breach of Contract: a Comparative Account (Clarendon Press Oxford 1988) 73–4.CrossRefGoogle Scholar

55 BGB 254(2).

56 Art 1227 (2) of the Italian Civil Code.

57 Where it is treated as a sub-species of contributory negligence, Cass 14 May 1992 or on the ground of ‘abuse of rightrsquo;.

58 The Principles of European Contract Law (1999) Art 9:505(1) and 9:505(2). Note however that Art 9:102 allows the innocent party to a breach to ask for specific performance unless the aggrieved party may reasonably obtain performance from another source. Unlike in the United Nations Convention on Contracts for the International Sale of Goods (1980), the availability of specific performance is therefore restricted.

59 UNIDROIT Principles of International Commercial Contracts (2004) Art 7.4.8(1) and 7.4.8 (2).

60 Derains L'Obligation de Minimiser le Dommage dans la Jurisprudence Arbitrale, RDAI, No 4 (1987) 375; CCI, No 2139, 2142, and 2216.

61 Chazal (n 1).

62 See Art 1149 of the Civil Code which expressly states that the damages due to the victim of a breach of contract for loss suffered are subject to the exceptions and modifications of Arts 1150–1155 of the Civil Code.

63 Subject to certain conditions, Cass 1ère civ (19 Jan 1982) D (1982) 457, noted by Larroumet; JCP (1984) II. 20215, noted by Chabas; RTD civ (1983) 144, obs Durry; Cass 1ère civ (8 Nov 1983) Gaz Pal 1984, 1, 384, noted by Tarabeux.

64 Rosenfeld and Bouchez (n 1).

65 Burrows, Remedies for Torts and Breach of Contract (OUP Oxford 2004) 122.Google Scholar

66 id ‘Contract, Tort and Restitution—A Satisfactory Division or not?’ (1983) 99 LQR 217, 266.

67 As Professor Bridge explained, ‘the law quite rightly seeks to bolster stoicism and self-reliance’ by imposing a duty to mitigate, so that the claimant is in charge of his own welfare (n 3) 409.

68 See Chazal (n 1) and Agard (n 1).

69 In English law on this point see Bridge (n 3) 409 in which he states that ‘it has been said that relieving the claimant from the duty to mitigate would punish the defendant’ See Ogus, The Law of Damages (Butterworths London 1973) 85.Google Scholar

70 [2002] 1 Lloyd's Rep 20, 46. See also Lord Macmillan's citation in Banco de Portugal v Waterlow [1932] AC 452, 506.

71 Lesters Leather and Skin Co v Home and Overseas Brokers (1948) 64 TLR where the Court of Appeal held that considering the circumstances prevailing at the time in India, the buyers did not have to contract with a seller they did not know and at 569, Lord Goddard CJ added that they were not ‘bound to be hunting the globe’ in order to mitigate.

72 Jewelowski v Propp [1944] KB 510.

73 Clippens Oil Co v Edinburgh and District Water Trustees [1907] AC 291 per Lord Collins 303; See Lagden v O'Connor [2004] 1 AC 1067, where Lord Nicholls said at 1072 that in terms of financial weaknesses ‘a negligent driver must take his victim as he finds him’ and Lord Hope of Craighead at 1084 thought that ‘the rules of mitigation, both in tort and in contract, do not require the victim to do what he cannot afford to do when he is seeking to reduce the damages payable by the wrongdoer’. The majority of the House of Lords took into account the claimant's want of means when assessing the amount of his loss.

74 Steele v Robert George [1942] AC 497; Richardson v Redpath [1944] AC 62; Selvanayagam v University of the West Indies [1983] 1 WLR 585, PC.

75 Pilkington v Wood [1953] Ch 1970; Horsfall v Haywards (1999) 63 Con LR 81; Dean v Allin & Watts [2000] Lloyd's Rep 469.

76 Finlay v Kwik Hoo Tong [1929] 1 KB 400, CA; Banco de Portugal v Waterlow & Sons Ltd [1932] AC 452; The Lily Prima [1976] 2 Lloyd's Rep 487.

77 Elliott Steam Tug Co v Shipping Controller [1922] 1 KB 127, 140–1; But see Weir (Andrew) & Co v Dobell & Co [1916] 1 KB 722.

78 McCormick, A Handbook on the Law of Damages (St Paul West 1935) 127.Google Scholar

79 Coase, ‘The Problem of Social Cost’ (1960) 3 Journal of Law and Economics.CrossRefGoogle Scholar

80 McCormick (n 78); Chitty on Contracts (n 3) 1479; Treitel (n 54) 184; Ogus (n 69) 85; Anson's Law of Contract (OUP Oxford 2002) 615; Feldman and Libling ‘Inflation and the Duty to Mitigate’ (1979) 95 LQR 270, 282; For a criticism see Bridge (n 3) 404–5.

81 Lawson, Remedies of English Law (Butterworths London 1980) 67; See also Michaud (n 8) 300–1; See, eg, Darbishire v Warran [1963] 3 All ER 310, 315 per Pearson LJ, ‘it is vital, for the purpose of assessing damages fairly between the plaintiff and the defendant, to consider whether the plaintiff's course of action was economic or uneconomic, and if it was uneconomic it cannot … form a proper basis for assessment of damages’.Google Scholar

82 Reifegerste, Petites Affiches (17 Oct 2003) No 208.

83 Chazal (n 1); Aubert (n 1).

84 On this point see Azard (n 1).

85 Reifegerste ‘Pour une Obligation de Minimiser le Dommage’ PUAM (2002); Hanotiau (n 8).

86 Reifegerste (n 85).

87 Viney (n 33).

88 ‘Avant-Projet de Réforme du Droit des Obligations (Art 1101 à 1386 du Code Civil) et du Droit de la Prescription (Art 2234 à 2281 du Code Civil)' under the direction of Professor Pierre Catala.

89 Title III of the Book III of the Civil Code on Contracts and Conventional Obligations.

90 Note the equally important proposed Art 1344 which states that ‘Any reasonable expenses incurred in preventing an impending loss or in avoiding its aggravation, or in reducing its consequences, constitute compensable loss.’

91 Aubert (n 1). In any event contractual clauses limiting compensation are generally accepted subject to certain conditions—(n 64).