ASSESSING DAMAGES FOR BREACHES OF RESTRICTIVE COVENANTS – NEW SUPREME COURT RULING

ASSESSING DAMAGES FOR BREACHES OF RESTRICTIVE COVENANTS – NEW SUPREME COURT RULING

The Supreme Court has recently issued guidance for assessing damages in claims for breach of restrictive covenants.  See here for the press summary and here for the full judgment.

The Supreme Court held that the trial judge and the Court of Appeal had adopted the wrong approach.  The gist of the claimant’s case was that it suffered financial loss in the form of lost profits and goodwill.  Whilst difficult to quantify, this is a relatively common type of loss, which can be quantified in a conventional manner.

By contrast the Claimants had not suffered the loss of a valuable asset created or protected by the right which was infringed.

There was a fairly detailed analysis of different methods for assessing damages and when to apply the different methods.