THE ACTUAL LOSS ILLUSION

Abstract

On the orthodox account of the private law compensatory principle, the claimant is compensated for the loss that they actually suffered because of the defendant’s wrong. Although the principle has various exceptions, it is widely accepted in both case law and academic commentary. We argue that it is nevertheless flawed, both doctrinally and theoretically. Claimants are never really compensated for their actual loss, and, contrary to popular belief, leading theoretical accounts of private law compensation (corrective justice and the continuity thesis) suggest that a principle of compensation for actual loss is not desirable in any event.