Measure Of Damages In Negligence And The Duty To Mitigate

The Court of Appeal has provided a helpful reminder that the general rule regarding recovery of damages in claims for negligence should not be applied mechanistically. The assessment of damages at the date when the damage occurred is the starting point, there is no reason why subsequent events should not be considered.

Background

In Bacciottini and another v Gotelee & Goldsmith (2016) the claimants issued a claim seeking damages for negligent advice given by the defendant firm of solicitors. The claimants had acquired a residential property in May 2007. The defendant had acted for the claimants in relation to the purchase and during that time had negligently failed to advise them that the property was subject to a planning restriction - restricting its residential use (the Restriction).

In 2008 the claimants discovered the Restriction. They received advice from new solicitors to apply to the District Council to have the Restriction lifted. This was done in September 2009, at a cost of £250. No objections to the claimants' application were raised and the application was approved in November 2009.

The claimants subsequently issued proceedings against the defendant, seeking damages in respect of their negligent advice. They said that had they received proper advice they would not have purchased the property or, alternatively, that they would not have purchased the property for any more than its value with the Restriction attached.

The defendant admitted it had been negligent, however, the Restriction could be, and in fact was, lifted at very little cost. There was no material effect on the value of the property, so the only loss the claimants had suffered was the cost of lifting the Restriction.

The trial judge accepted that the claimants had paid approximately £100,000 more than the property was actually worth with the Restriction attached. However, he also held that applying to lift the Restriction was a simple, obvious and cheap step to take. As a result he did not accept the claimants' argument that they would have purchased the property at a reduced price or that they would have withdrawn from the sale had they been told about the Restriction at the outset.

The court held that awarding the claimants damages as claimed "would overcompensate" them. The principles of mitigation needed to be applied. In summary, they had no other realistic option but to apply for the Restriction to be lifted. The application was made pursuant to their duty to...