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Previous work has considered the use of sliding mode observers for fault detection and isolation (FDI) in uncertain linear systems whereby the unknown faults are reconstructed by appropriate processing of the so-called equivalent output error injection. The paper builds on this work and considers such a scheme within the broader context of fault tolerant control. Specifically, by correcting the faulty measurement by an estimate of the fault obtained from the sliding mode FDI scheme, good closed-loop performance is still maintained. An example of such a scheme, which has been implemented on a laboratory dc motor rig, is described.