LSREF III Wight Ltd v Gateley LLP

LSREF III Wight Ltd v Gateley LLP

The appropriate date for assessment of loss in a professional negligence claim involving negligent advice on security for a loan is the trial date if the loss remains uncrystallised. The claimant unreasonably failed to mitigate its loss by not negotiating a variation of the lease before trial, but is entitled to recover the actual cost of mitigation incurred after trial, as the cost was not recouped from the sale proceeds and directly remedied the loss caused by the defendant's negligence.

Parties
Claimant/respondent: LSREF III Wight Limited; Defendant/appellant: Gateley LLP
Jurisdiction
England and Wales
Judgment Date
13 April 2016
Procedural Posture
Civil Appeal (professional Negligence) / Appeal and Cross Appeal From High Court Quantum Only Trial
Outcome
Appeal and cross-appeal allowed; damages award substituted
Legal Topics
Solicitor's Duty of Care, Mitigation of Loss, Damages Assessment, Negligent Advice, Security for Loans
Professional Negligence Banking and Finance Law Property Law Solicitor's Duty of Care Mitigation of Loss Damages Assessment Negligent Advice Security for Loans

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Parties

LSREF III Wight Limited

Claimant/respondent

Gateley LLP

Defendant/appellant

Procedural Posture

Civil Appeal (professional Negligence) / Appeal and Cross Appeal From High Court Quantum Only Trial

Legal Issues

  1. 1 What is the appropriate date for assessment of loss in a professional negligence claim involving negligent advice on security for a loan?
  2. 2 Did the claimant unreasonably fail to mitigate its loss by not negotiating a variation of the lease before trial?
  3. 3 Is the claimant entitled to recover the cost of mitigation as damages?

Ratio Decidendi

The appropriate date for assessment of loss in a professional negligence claim involving negligent advice on security for a loan is the trial date if the loss remains uncrystallised. The claimant unreasonably failed to mitigate its loss by not negotiating a variation of the lease before trial, but is entitled to recover the actual cost of mitigation incurred after trial, as the cost was not recouped from the sale proceeds and directly remedied the loss caused by the defendant's negligence.

Court Disposition

Appeal and cross-appeal allowed; damages award substituted

Orders

  • Substitute damages award of £157,100 (cost of lease variation and associated legal costs) with interest at 2% per annum from 27 January 2015
  • Original damages award of £240,000 set aside