This article was originally published in the winter 1998 issue of the Expert Witness.
Should an injured person hire a replacement? Sell the business? Lease assets? Or, finally, operate as best they can without a replacement?
We presume that an injured business owner does as well as they can, under the circumstances. Shortly after an injury, it will often be difficult to assess how complete the recovery will be. I would suggest that a plaintiff who has spent 15 years building a business cannot be expected to quickly conclude that a sale is their best option. They may believe that they have a right to continue to operate the business, even if it can be demonstrated that to continue does not minimise the loss. If the court accepts that such a right exists, the loss would be calculated under the presumption that the business will continue to be run by that person indefinitely. Conversely, if the court states that “maximum mitigation” must be pursued, whatever that implies, then each alternative must be assessed to discover which minimises the loss.
In most cases the outcome mixes these alternatives. The pre-trial loss generally allows for good-faith errors, as I believe it should. If the plaintiff did what seemed best, possibly hoping for a recovery that did not occur, then the pre-trial loss calculation uses actual post-accident income, not what should have been generated, as seen with benefit of hindsight. The future loss estimation then presumes that the best possible mitigation will be pursued.