Amonoo v Grant, Seifert Grower

Loss caused by necessary borrowing may be recoverable as consequential damage where the defendant knew that borrowing would be required. In a loss-of-chance assessment, the court may begin with the best outcome that might have been achieved and discount it to reflect uncertainty. Where the assessment is deliberately broad and approximate, rounded figures may be used. However, where the loss includes interest actually charged on borrowing, the calculation should reflect compound interest if interest was added to the principal. A party must also have a proper opportunity to address the court on a material interest issue.

The appellant sued her former solicitors for negligence arising from an unauthorised settlement of landlord and tenant proceedings. The trial judge found liability and awarded £10,000, including an element for interest charged by the appellant’s building society on money borrowed to satisfy the settlement. The appellant appealed on the treatment and calculation of that interest and on procedural fairness.

The Court of Appeal considered whether the interest was recoverable as damages, whether the trial judge was entitled to use a rounded simple-interest calculation, and whether the appellant had been given a proper opportunity to address the issue.

1. Appeal allowed in part. Potter LJ gave the judgment, with which Jonathan Parker LJ agreed. The award was increased from £10,000 to £11,314. There was no order as to costs.
2. Interest charged by the building society was recoverable as part of the appellant’s damages. The solicitors knew that the shortfall resulting from the landlord’s claim and the appellant’s counterclaim would have to be funded by borrowing. The interest was therefore within the second limb of the rule in Hadley & Baxendale and was not too remote.
3. The trial judge was entitled to assess the claim by reference to the loss of a substantial chance. The proper starting point was the best result that might have been obtained, followed by a discount reflecting the uncertainty of achieving it. Since the judge had adopted an approximate, broad assessment rather than assigning a precise percentage chance to a precise figure, it was legitimate to use rounded figures and retain a principal figure of £9,000.
4. The interest calculation was nevertheless erroneous. The mortgage statement showed that interest was added to the principal annually. The damages should therefore reflect the compound interest actually payable, rather than simple interest of approximately £5,000. Using £6,838.61 for interest and the judge’s ten-fourteenths discount produced damages of £11,314.
5. The trial judge’s reference to hearing argument on interest concerned statutory interest under section 35A of the Supreme Court Act 1981. The appellant had not been given a real opportunity to address the court on the calculation of interest. That procedural failure reinforced the need for the Court of Appeal to correct the award.

• Court of Appeal (Civil Division): The appeal from the order of HHJ Overend was allowed to the extent of increasing the damages award from £10,000 to £11,314. No order as to costs.
• High Court: Following a trial on liability and quantum on 18 December 1998, HHJ Overend found the respondents liable and awarded £10,000, with costs thereafter payable by the appellant.