Professional negligence — Damages — Separate acts of negligence by separate solicitors regarding same property — Whether damages overlapped — Whether deputy judge should have discounted damages awarded — Appeal allowed in part
In April 1991, the respondent purchased 2.5 acres of land. He was represented by a firm of solicitors (G) in connection with the purchase. Part of the land was occupied by W, who applied to the court for a declaration that he had acquired title to that land by adverse possession. The respondent sought legal advice from the appellant concerning the action relating to W and as regards the possibility of bringing proceedings against G for negligence in the handling of his purchase.
A claim against G was settled in April 1996. W died and C took over his action. In September 1996, C’s solicitor proposal whereby C would relinquish the claim for adverse possession on payment of £25,000 plus costs. The respondent rejected that proposal. A judge subsequently ruled in favour of C.
The respondent believed that he had been badly advised and that, had the appellant not been negligent, he would have settled the action against W in September 1996. He claimed damages against the appellant. A deputy judge found that, on the balance of probabilities, the respondent would have settled the W action by a payment of £20,000 plus costs, and he awarded damages for loss of chance. In so doing, he rejected the appellant’s argument that no damages should be awarded since the respondent had been fully compensated for any loss by G’s payment of £100,000 in the earlier action.
At the Court of Appeal, the appellant contended that, even if the judge had otherwise been correct in his conclusions, he should have discounted the damages awarded by an appropriate percentage to allow for the possibilty that the W action might not have been settled.
Held: The appeal was allowed in part.
As a matter of principle, the two claims and heads of damage were, on analysis, unrelated and could not impinge on each other. However, the deputy judge had erred in not discounting of 20% of the damages awarded, assuming that the likelihood of a settlement having been reached in September 1996 was 80%.
Where a claimant had causes of action against two defendants, arising out of distinct contracts or events, but which resulted in connected damage, the proper outcome was dependent upon the particular facts. It was dangerous to lay down general principles, beyond the proposition that a loss that had been compensated for in one set of proceedings could not normally be recoverable in another because it could no longer be considered a loss.
When damages were being assessed by reference to what would have happened, the applicable principles were those laid down in Allied Maples Group Ltd v Simmons & Simmons [1995] 1 WLR 1602. In the present case, the court had to determine what would have transpired had the appellant given the correct advice. That involved considering whether, as the respondent contended and the judge accepted, the W action would have settled, which in turn involved considering how the parties would have acted in hypothetical circumstances. The respondent had to satisfy the judge, albeit only on the balance of probabilities, that he would have been prepared to settle the action.
Per Curiam: Where the same claimant claimed against different defendants for different breaches of duty at different times arising out of different retainers, but leading to interrelated damages, it was obvious and sensible that both actions should be heard together.
Andrew Nicol (instructed by James Chapman & Co) appeared for the appellant; Robert Sterling (instructed by Mason & Co, of Altrincham) appeared for the respondent.
Eileen O’Grady, barrister
