An injured party is under a duty to attempt to mitigate his loss.  But what happens when the mitigation is so successful that it eradicates the loss?  This was the issue which arose in the recent case of Bacciottini and Cook v Gotelee & Goldsmith [2014] EWHC 3527.

The facts

In 2007 Mr Bacciottini and Ms Cook (the claimants) bought The Granary, an old cottage and outbuildings with a view to living in the cottage for a few years and then developing the site. The cottage was subject to a planning restriction which only permitted it to be occupied as ancillary accommodation to the nearby Hall. Unfortunately their solicitors failed to spot the planning restriction, so the claimants paid the full asking price of £550,000 in ignorance of the restriction. Not surprisingly, liability was admitted.

His Honour Judge Simon Barker QC accepted that the prospects of lifting the planning restriction were very high, and that the value of The Granary in 2007 with the planning restriction was around £450,000. So on the face of it, the claimants made an overpayment of £100,000. They argued that if they had been properly advised, they would either have purchased The Granary for £450,000 or withdrawn from the purchase.

The decision

The judge was not persuaded that the claimants' choices were that limited. The solicitor's duty was not to save the claimants from making an overpayment, but to enable them to negotiate in full knowledge of the facts. If they had negotiated with the vendor, it was unlikely they would have bought the property for £450,000 since applying to lift the restriction was such a simple and cheap step to take. As damages are designed to put the injured party back in the position he should have been in, an award of the overpayment of £100,000 would overcompensate the claimants.

But even more importantly, before issuing proceedings, the claimants had successfully applied to lift the planning restriction. They argued that they had not done so in mitigation of their loss, but to progress their development plans. The judge found that they had no realistic option other than to apply to lift the restriction, as it was the course that any sensible owner and occupier would take. It was directly caused by the solicitors' negligence and was made pursuant to their duty to mitigate their losses. The effect of the mitigation was to eradicate their loss almost altogether. The claimants were awarded £250.

Comment

The claimants had tried to argue that their actions in applying to lift the planning restriction were unrelated to the solicitors' negligence and so did not amount to mitigation. However this case shows that even if there is more than one reason for the claimant's actions, provided that there is a direct causal link between those actions and the breach, it still amounts to mitigation.