Profit

What can be said, however, is that where the financial loss is not a direct consequence of physical damage, it will be difficult to persuade the court to allow compensation. The more the loss relates purely to profit, the harder it will be to persuade the court to compensate that loss. Remember that the rule in Re Polemis in respect of the remoteness test for the tort of negligence has now been over-ruled and replaced by the rule as laid down in The Wagon Mound (No. 1) (1961). This decision was of course after the case of the Liesbosch. Following The Wagon Mound the test of remoteness for damages in the tort of negligence is now one of ‘reasonable foreseeability’. Thus the plaintiff will recover all damages which are reasonably foreseeable as a result of the defendant’s negligence, whether or not the injury caused was a direct result of the negligence. The general principle for the assessment of damages is restitutio in integrum. (i.e. The injured party should be put back into the same financial position as he was immediately before the tort was committed). If this means, however, that the value of the ship after repairs is increased, then this is the wrongdoer’s bad luck. The repairs must be satisfactory and carried out at reasonable cost under the circumstances. The wrongdoer has no right to choose the place of repair or to nominate the repairer; but, conversely, the innocent shipowner must act prudently and as if he was uninsured or un-indemnified in making these choices. The wrongdoer is also liable for consequential losses i.e. delay due to the collision, loss of profit through losing use of the vessel although profit loss must not be too speculative or remote. The true measure of damages is the net rate of profit under the immediate charter. Loss of profit from not being able to use the vessel is profit which is a direct and immediate consequence of the actual injury. i.e. It is parasitic upon the injury. This, therefore, is not ‘pure’ economic loss and is recoverable.