Civil liability and replacement values

Question

Meet Bob. Bob's car was destroyed by Alice, thus besides other potential consequences, rendering Alice civilly liable for the value of the car.

Suppose that the car was bought on a temporary, time-limited promotion by the company wherein they were being sold for an early bird 50% off RRP, which promotion is no longer available.

Or, suppose that Bob had bought it for £1000 in a once in a lifetime sweetheart deal from his father, when the lowest one can find such a model of car for in functional working condition on the market is £5000.

Never again could anyone conceivably find that type of car again and replace it for £1000.

However, Bob's purchase receipt for his car shows a purchase price of £1000.

What was Bob's civil loss that Alice may be civilly liable for?

England and Wales sought, answers of all jurisdictions welcome.

Answer 1

canadaengland-and-wales

Barring any statutory overlay, damages (liability) from vehicle damage in an automobile collision are assessed to be the market value that was lost: the difference between the pre- and post-collision fair market value (e.g. Lai v. Leung, 2020 BCCRT 1111 at paragraph 32; I know this is an administrative tribunal, but they're working at the front lines of this kind of dispute, so it is informative to see how they're applying the law).

This is merely an application of the overarching principle in negligence that the plaintiff is entitled to a sum that would put them in the position they would be in had the negligence not occurred. See Cunningham v. Wheeler; Cooper v. Miller; Shanks v. McNee, [1994] 1 S.C.R. 359, which states this is a long-standing principle in Canada and the United Kingdom:

The fundamental principle is that the plaintiff in an action for negligence is entitled to a sum of damages which will return the plaintiff to the position the plaintiff would have been in had the accident not occurred, in so far as money is capable of doing this. This goal was expressed in the early cases by the maxim restitutio in integrum. The plaintiff is entitled to full compensation and is not to be denied recovery of losses which he has sustained: Livingstone v. Rawyards Coal Co. (1880), 5 App. Cas. 25 (H.L.), at p. 39, per Lord Blackburn. It has been affirmed repeatedly by Canadian courts and once again in more recent times by the House of Lords: ". . . the basic rule is that it is the net consequential loss and expense which the court must measure": Hodgson v. Trapp, [1988] 3 W.L.R. 1281, at p. 1286. At the same time, the compensation must be fair to both the plaintiff and the defendant. In short, the ideal of the law in negligence cases is fully restorative but non-punitive damages. The ideal of compensation which is at the same time full and fair is met by awarding damages for all the plaintiff's actual losses, and no more. The watchword is restoration; what is required to restore the plaintiff to his or her pre-accident position.

Evidence that could used be to establish the the pre- and post-collision market value includes appraisals, insurance adjustors estimates, repair estimates, used-car valuation datasets, etc.

Answer 2

When it is possible to put Bob back in the same state that he was before, then that is what Alice needs to pay for. If Bob managed to buy a £20,000 car for £10,000, then he owned a £20,000 car, and Alice needs to pay so that Bob is in the same position again and owns a £20,000 pound car.