“When a judge says ‘It ill behooves the Defendant to argue that his negligence did not cause the Claimant’s loss…’, you know he doesn’t understand how a causation defence works.” So commented a colleague of mine in my early days of doing professional negligence cases.
In a recent solicitor’s negligence claim the High Court has found breach of duty by the conveyancer made out, but the claim nevertheless failed on causation. The Claimant was a property developer seeking to buy a plot of land on which to build (or to sell on with planning permission). Negotiations with the vendor gave rise to the developer taking an option over the shares in the vendor company (rather than an option over the land itself) while the developer set about applying for planning permission. By the time he came to exercise the option the vendor had become insolvent and the liquidator had sold the land on to someone else. The developer sued his former solicitors for the loss of profits he would have made if he had bought the land.
The conveyancer had not properly appreciated that the option gave his client no proprietary interest in the land and the judge found this to be a breach of the duty to be expected of a solicitors’ firm advising on such a transaction. However, he went on to find that even if the developer had been given the correct advice he would have followed the same course of action rather than seeking to acquire an option over the land, since he had no reason to fear for the vendor’s solvency. And even if he had acquired such an option, he would not, in fact, have exercised it. On those findings, the claim failed.
This is a reminder that claimants always need to consider the requirement to prove that the breach of duty did actually cause the loss complained of. It can be all too easy to overlook that requirement when the case on breach and on damage looks strong.
That was also seen in a case 3 years ago in different circumstances where the defendant surveyor overvalued a property having failed to follow the methodology laid down in the RICS Red Book requirements. However, the judge found that even if he had sought to comply with those requirements he would have arrived at the same incorrect valuation because in fact the overvaluation (and hence the lender’s loss) was caused by the fraudulent conduct of the vendor in marketing the property. He had gone to significant lengths to mislead the valuer, including the manufacturing of erroneous comparables.
In both cases the client was let down by the professional, but the courts found other causes for the loss.