One Step (Support) Ltd v Morris-Garner

The case of One Step (Support) Ltd v Morris-Garner was heard by the UK Supreme Court, with the appeal being dismissed. The primary issue before the Court was the availability of "negotiating damages" in cases of breach of contract. Negotiating damages are those assessed by reference to a hypothetical negotiation between the parties, for the amount that might reasonably have been demanded by the claimant for releasing the defendant from their obligations. This type of damages is often referred to as Wrotham Park damages, following the case of Wrotham Park Estate Co Ltd v Parkside Homes Ltd.

The Court considered the legal principles governing the award of negotiating damages, and concluded that such damages could be available in cases where a party is in breach of contract, provided certain conditions are met. The Court held that negotiating damages may be appropriate where the breach was deliberate, the claimant would have difficulty establishing financial loss, and the claimant had a legitimate interest in preventing the defendant's profit-making activity in breach of contract. However, the Court also stressed that the award of negotiating damages should be approached with caution, and the amount awarded should be carefully considered to ensure it is just and fair.

In the present case, the Court of Appeal had upheld the trial judge's finding that negotiating damages were available. The Supreme Court agreed with the Court of Appeal's decision, and held that the award of negotiating damages was justified in this case. The Court emphasised that the assessment of negotiating damages should be based on a fair and reasonable hypothetical negotiation, taking into account all relevant factors, including the economic value of the right infringed and any other circumstances that may affect the value of the right.

In summary, the Supreme Court's decision in One Step (Support) Ltd v Morris-Garner provides guidance on the availability and assessment of negotiating damages in cases of breach of contract. The Court held that such damages may be appropriate in certain circumstances, but their award should be approached with caution and carefully considered to ensure it is just and fair.