The assessment of damages in professional negligence claims can raise some interesting questions, including identifying the date at which the damages should be assessed. The default position is that losses should be calculated as at the date the wrong occurs, but the court can depart from this in the right circumstances. The recent case of Gosden and another v Halliwell Landau and another [2021] EWHC 159 (Comm) is one such example.
The Negligence
The claimant's mother, Dr Jean Weddell, was a woman of considerable means. Her assets included a property in Kennington, London which she wished to leave to her son (the claimant, Professor Gosden), and, in April 2003, to mitigate a considerable inheritance tax liability, she instructed the defendant firm of solicitors to place that property in trust on his behalf.
Dr Weddell was to remain living in the property as the registered owner during her lifetime, and it was to pass to the claimant on her death. However, in October 2010, without the claimant's knowledge or consent, his mother sold the property. She later died, in March 2013, and the sale was discovered in 2015.
The normal course of action when setting up such a trust would have been for a restriction to be registered against the title of the property to prevent it being sold without the claimant's consent as beneficiary of the trust. However, the defendants failed to take this step and, in an earlier decision from the Court of Appeal, they were found to have been negligent.
The question which now fell to be determined by the High Court was the value of the damages.
The date of assessment
The claimant was entitled to recover the value of the property as compensation for his loss. The difficult issue for the court to deal with was identifying the appropriate date at which to assess that value.
It was agreed that the default position is that damages should be assessed as at the date that the wrong occurred. The defendant argued this meant the damages should be assessed using the value of the property when it was sold in 2010. The claimant's position was that this default position failed to adequately compensate him for his loss and his damages should instead be assessed at the date of the trial.
Delivering Adequate Compensation
Judge Pelling QC agreed with the claimant in that it was appropriate to depart from the default position to determine the correct date of assessment. However, the date of the trial was not the appropriate point at which to value the loss.
Instead, the court accepted the argument, advanced as an alternative by both the claimant and the defendant, that the loss should be assessed at the date of the deceased's death. This was the point at which, but for the negligence, the claimant would have been entitled to receive the property.
Had the court assessed the loss as at the date of the sale in 2010, it would have failed to recognise the increase in the property's value that would have taken place before it transferred to the claimant following the death of his mother. Hence the usual approach to assessing damages would not have adequately compensated the claimant for his loss.
A logical application of the 'but for' rule?
This case departs from the default position that damages for professional negligence fall to be assessed at the date when the wrong occurs and serves as a useful reminder that the court's primary concern when assessing damages is to put the wronged party, as far as possible, in the position they would have been in had the breach of duty not occurred.
The court's ruling appears to do little more than take this fundamental principle to its logical conclusion based on the particular facts of the case.
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