Damages are the obligation to compensate loss caused by a breach of contract or a tort. The starting point is full compensation: the injured party must as far as possible be put in the position they would have been in had the event not occurred.
Legal basis
Section 6.1.10 of the Dutch Civil Code governs the subject. Article 6:95 provides that financial loss is recoverable, and other detriment only where the law provides for it. Article 6:96 counts as financial loss the reasonable costs of preventing or limiting loss, of establishing loss and liability, and of obtaining satisfaction out of court. Article 6:97 allows the court to assess loss in the manner most consistent with its nature, and to estimate it where it cannot be determined precisely. Article 6:101 deals with contributory negligence, Article 6:106 with non-material loss and Article 6:109 with the power to reduce an award.
How it works in practice
Assessment starts by comparing the actual situation with the hypothetical situation without the event. For business losses that means substantiation with figures over several years, not merely a forecast. Extrajudicial costs are compensated on the statutory scale where a monetary claim is involved. Statutory interest runs from default, and in tort from the moment of the event.
Where it goes wrong
Substantiation stops at a schedule of loss with no underlying documents. A second error is confusing lost turnover with lost profit; only the latter is loss. Third, the duty to mitigate is underestimated: a claimant who fails to take reasonable steps will not recover avoidable loss.
Related terms
Damages follow breach of contract or a tort and can be limited contractually by an exoneration clause.
Would you like to know what your claim is worth in law? Our civil law specialists assess the heads of loss.
