Dear Colleagues

I am working on a short article about compensating advantages and am a bit perplexed about the results in IBM v. Waterman. Specifically, I am un-sure of the significance of the fact that the benefit in question is a "non-indemnity" benefit. As you know, the Court's jurisprudence on compensating advantage is replete with the assertion that benefits are not deductible "if they are not intended to be an indemnity for the sort of loss caused by the breach."

My first question concerns the court's definition of "non-indemnity" benefits. What, exactly, does the court mean by that phrase? I understand the concept of an indemnity benefit, such as health insurance, that pays the costs actually incurred. Is the court suggesting that there are other types of insurance policies that pay fixed sums simply upon the happening of an event? Bradburn seems to suggest there are. If that's true, I wonder if anyone could point me to a case involving such a benefit (besides Waterman).

My second question is, (and this is the argument I am trying to make), why should it matter? If the purpose of damage awards is to compensate, then it ought not to matter whether the benefit was an indemnity or non-indemnity benefit. that is to say, if the plaintiff is fully compensated either by indemnity insurance or some insurance in the form of a wager upon the non-occurrence of an event (as Bradburn seems to contemplate), then in the absence of a desire to punish, why should the ultimate form of the plaintiff's contract with the insurer matter?

I understand one taking the position that a defendant ought not to have the benefit of the plaintiff's insurance, ( a position with which I disagree, I am merely trying to understand why that rule should depend on whether the benefit comes in the form of an indemnity or non-indemnity policy.

Please excuse me if this is an elementary problem I should have learned in law school. However, I would be grateful if anyone can plug the holes in my obviously in adequate education.

Best
Matt

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