4.12 Damages: Mitigation is a legal term referring to a party's efforts to minimize the damages they are liable for in a legal dispute. Mitigation of damages typically involves two types of damages: compensatory damages and punitive damages. Compensatory damages are meant to restore the party to their pre-dispute position, while punitive damages are meant to punish the party for their wrongful actions. Mitigation of damages can involve a variety of strategies, such as securing a settlement, working out a payment plan, or filing a counter-suit. In some cases, a party may be able to prove that the damages they are liable for are not as severe as initially believed, resulting in a reduction of the amount they are liable for. Mitigation of damages is an important part of the legal process, as it can help to avoid long and expensive court cases.