[2007] EWHC 2166 (QB)

The claimants instructed the defendant solicitors to act for them in the negotiation of a lease of new business premises. Although the claimants wanted the freedom to erect certain structures, those works were included in a section of the lease that imposed obligations on the claimant, and consequently, the improvement effected by those works fell to be reflected in the rent review. The defendant admitted it had been negligent in failing to spot this consequence. The claimants entered the lease, but the business deteriorated. They extricated themselves from their predicament by accepting an offer to take an assignment of the lease for £45,000 and moved to smaller premises and claimed damages against the defendants.

The parties agreed that the appropriate measure of loss was the cost of the claimant extricating itself from its predicament, coupled with the costs wasted by embarking on a venture that had to be aborted at an early stage. The defendant, represented by Mills & Reeve, argued that the claimants had suffered no loss because the business was failing in its new setting and they would have moved to the smaller premises in any event.

The judge found for the claimant on causation. The act of extricating oneself from a predicament by taking reasonable steps does not break the chain of causation. If the consequences flowing from that course of action were reasonably foreseeable then they were, in principle, recoverable. He concluded that the claimants’ decision to extricate themselves from the lease was triggered by the bad news about the rent review clause. There was, therefore, a causal link between the defendant's negligence and the losses suffered by the claimants.