Offers You Just Can't Afford To Refuse! Solicitors Negligence - A Cautionary Tale On Mitigation Of Losses

The recent case of Hermann v Withers LLP [2012] EWHC 1492 (Ch) provides a cautionary tale to property lawyers giving useful guidance on the steps a party should take to mitigate their losses and whether costs of mitigation are recoverable.

The facts In this case, Mr and Mrs Hermann (“the Hermanns”) purchased a property in London valued at £6.8 million. In the course of pre-exchange enquiries, it became apparent that it was ambiguous whether ownership of the property also included a statutory right to use a communal garden that was situated opposite the property. Whilst the original estate agent's advertisement for the property stated that it “has access to a communal garden” this right was not provided for in the draft conveyance or title documents.

The Hermanns' lawyers researched the issue and concluded that the owners of the property were entitled to access under the Kensington Improvement Act 1851. Following the purchase of the property, the Hermanns were advised by the committee who ran the communal garden (the “Committee”) that they were not entitled to access.

The Hermanns therefore instructed solicitors in October 2008 and a series of correspondence followed between the Hermanns and the Committee in relation to the access rights. On 13 May 2009, the Committee offered to grant the Hermanns a 50 year licence for garden access for a price of £25,000. The Hermanns rejected this offer and commenced legal action in an attempt to mitigate their losses. The matter went to court in 2010 and the court found against the Hermanns. After an expensive court battle, the Hermanns still had no access rights...