Harman v Burge

In an inquiry as to damages, the claimant must prove loss, but damages may be assessed broadly where exact quantification is impossible. The court must identify the loss caused by the wrong, separating it from losses attributable to other events. A counterfactual comparison may be required. Unsupported assumptions about the duration or scale of loss will not suffice. Reasonable mitigation expenses may be recoverable even if unpaid, provided the claimant is legally liable to pay them.

The defendant admitted passing off and unlawful interference arising from his takeover and disruption of the claimant’s business website. Judgment had previously been entered on those admissions, and the hearing concerned the resulting inquiry as to damages. The claimant sought lost profits, wasted expenditure on listings and subscriptions, and mitigation costs, alleging immediate disruption and a longer-term decline in search-engine visibility.

The issues concerned causation, the effect of two business relocations and other competing causes, the appropriate profit assumptions and time discounts, and whether unpaid assistance costs could be recovered.

1. Damages principles. The court adopted the principles set out in SDL Hair Ltd v Next Row Ltd [2014] EWHC 2084 (IPEC): damages compensate rather than punish; the claimant bears the burden of proving loss; recoverable loss must be foreseeable, caused by the wrong and not excluded by public policy; and the court may compare the actual history with a counterfactual history in which the wrong had not occurred.
2. Lost profits. The claimant established short-term harm from the website takeover, but the evidence did not establish that reduced search-engine rankings and broken links caused the alleged three-year loss. The expert calculations depended on unsupported assumptions. The court allowed for a 50% reduction in turnover following each relocation, profit margins of 70% for camping and 50% for trekking, and a 50% discount for lost profits in 2010/11. No lost profits were awarded thereafter.
3. Other losses. The claim for cancelled listings and advertising failed for want of proof. Mitigation costs were recoverable where incurred under a legal liability, even though not yet paid, applying Randall v Raper (1858) EB & E 84 and Total Liban SA v Vitol Energy SA [2001] QB 643.
4. Disposition. The defendant was ordered to pay £39,701 in damages and interest.