What types of damages are considered direct or indirect?


This case was an appeal against the High Court’s (HC) ruling that certain types of losses suffered by C were direct, including ex-gratia payments to customers, and were therefore not excluded by the liability clause set out in the contract. The question for the Court of Appeal (CA) was whether the range of direct losses claimed were indirect instead; if so, they would not therefore be recoverable.


For the facts see here but essentially A claimed that damages under certain heads of loss were not recoverable by C as they were ‘indirect or consequential’ and therefore excluded by the corresponding exclusion clause within the contract.


The CA agreed with the HC’s ruling that all of the following heads of damage were not to be excluded because they arose naturally from, and were a very likely consequence of, the breaches in question:

 points to note:

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