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ARTICLE · 24 JUNE 2016

The Worth Of "Diminished Value" Claims In Ontario

Miller Thomson
Miller Thomson
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The claim goes by many names: "diminished value", "diminution in value" and "accelerated depreciation".

CanadaInsurance
Patricia Forte
Patricia Forte
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Introduction

The claim goes by many names: "diminished value", "diminution in value" and "accelerated depreciation". The terms are interchangeably used to describe the economic loss of a property's value as a result of the property having been damaged.1 The concept of diminished value as it relates to vehicles is associated with the perceived loss of value in a vehicle following an accident-related repair. The "loss" is premised on the likelihood that an informed buyer will pay less to buy a vehicle that was in an accident compared with the amount the same buyer will pay for the same vehicle had it not been in an accident.

Common Law versus the Legislative Scheme

The common law has recognized and permitted diminished value claims since the early 20th century. In Payton v. Brooks2 the U.K. Court of Appeal determined that damages for diminished value could be claimed. Lord Roskill set out the following principle:

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