This case considered the damages that were recoverable in respect of a solicitor negligence claim, where the loss suffered by the Claimant had been eroded by the Claimant’s mitigating conduct.
The Claimants instructed the Defendant solicitors in relation to a purchase of a property they were looking to develop. The Claimants entered into the transaction having been told by the Defendant that a local search had been carried out and that planning consent was in order, as well as there being no adverse planning conditions. The property was in fact subject to a planning condition restricting its development. The Claimants argued that as a consequence of the Defendant not providing the correct information regarding the planning restriction, they purchased the property for approximately £100,000 less than its true value. They argued that had they known of the planning restriction, they would have continued with their purchase of the property, albeit at a reduced value.
The Defendant admitted that their failure to provide the correct planning information was negligent but contended that this caused no more than a £250 loss to the Claimants (being the costs incurred in removing the planning restriction). The Claimants submitted that that the loss they had suffered was to be quantified by reference to the excessive purchase price.
Although the Defendant’s negligence meant the Claimants did not make an informed decision as to the purchase of the property and the purchase price, the Claimants’ overpayment was not a direct reflection of the loss they had actually suffered. The Court decided that the purpose of the Defendant’s duty was to put the Claimants in a position of being able to negotiate the purchase, whilst knowing the correct and relevant facts. A negotiation would not have likely resulted in a reduction of the sale price by a full £100,000 and as such, damages amounting to this would have over-compensated the Claimants. The Court decided that the Claimants’ act of applying to remove the restriction was a direct consequence of, and had been directly caused by, the Defendant’s negligence and was therefore made pursuant to the Claimants’ duty to mitigate. It was decided that the overpayment loss claimed by the Claimant had been eradicated by their own mitigation and damages were confined to £250.
This case is a good demonstration of a situation where damages have effectively been eradicated due to a Claimant’s mitigating actions.