Specifically, it measures the value of something before and after the causative act or omission creating the lost value in order to calculate compensatory damages.
[9] When P's heirs have added up what they lost they'll have discovered the difference between what they would have had B not acted wrongfully, and what they ended up with: the diminution in value of the contract fund.
In this example, calculating the diminution in value of the contract fund that occurred by B's wrongdoing is helpful to a legal tribunal or settlement negotiation in discovering not only the value of property lost, but the initial enrichment value to B.
Elliott and Company DIV Appraisals Courtney vs. Publix, Florida District Court of Appeal, (2d Cir.
209–230, April 2004.SSRN abstract and Law & Policy Journal Example of usage in state legislation: North Carolina General Assembly, Auto Insurance/Diminution in Value, 2009.
[1] Example of usage in bankruptcy and creditors' rights: Stuart, Court Denial of Request For Adequate Protection Does Not Trigger Superpriority Status, 2000.FindLaw Legal terms glossary (Wiktionary) [2] Zalma and Wickert, First-Party Diminution In Value Cases In All 50 States.