Saunders v Williams

In assessing damages, a foreseeable loss of use does not cease to be recoverable merely because the loss continued for longer than the wrongdoer expected. The relevant question is mitigation. The defendant bears the burden of proving that the claimant failed to take reasonable steps to reduce the loss, including by examining evidence of any inability to finance remedial work.

Where a trial judge has applied the wrong approach, an appellate court may nevertheless substitute its own assessment instead of ordering a retrial. It must exercise that power consistently with the overriding objective, including proportionality, the realistic range of any further award and the need to conserve court resources.

A builder admitted liability for damage caused in 1992 to a party wall of the claimant’s semi-detached house. Jacob J, sitting in the Technology and Construction Court at Bristol County Court, awarded the admitted reinstatement cost of £24,572 and £1,000 for consequential loss arising from loss of use, distress and inconvenience.

The claimant appealed the latter assessment. She also challenged Jacob J’s authority to hear the case, sought to reopen issues for which permission to appeal had been refused, and sought a remittal for further factual investigation. The central issue was whether the loss-of-use claim had wrongly been restricted by a foreseeability-based one-year period rather than determined by the law of mitigation.

1. Appeal allowed in part unanimously. Pill LJ gave the reasons, with which Chadwick LJ and Clarke LJ agreed. The award for consequential loss was increased from £1,000 to £8,000. The claimant’s separate applications were refused.
2. Jurisdiction. Jacob J had authority to hear the Technology and Construction Court claim. Paragraph 1.3 of the Practice Direction permitted a case allocated to that court to be dealt with as directed by a judge of that court. Judge Graham Jones’s authorisation of Jacob J was sufficient, and paragraph 2.3 created no obstacle.
3. Mitigation. The trial judge had adopted an unsustainable approach by treating the issue solely as the period of disrepair foreseeable by the builder. The governing principle, classically stated in British Westinghouse Company v Underground Railway [1912] AC 673, was that compensation is qualified by the claimant’s obligation to take reasonable mitigating steps. The defendant bore the burden of proving, on the balance of probabilities, that the claimant had acted unreasonably.
4. The evidence required findings on matters including the claimant’s asserted lack of funds to engage another builder. The trial judge made no such findings. On the available material, however, the court considered that the defendant would probably not have established an unreasonable failure to mitigate before judgment. The appropriate annual assessment remained £1,000 for each of the eight years.
5. Disposal without remittal. Exercising its power under the Civil Procedure Rules, the court declined to remit the issue. A further hearing would be disproportionate, consume scarce Technology and Construction Court resources and offer no real prospect of a higher award. The court therefore substituted £8,000 for the consequential-loss award.

• Court of Appeal (Civil Division) — allowed the appeal to the limited extent of substituting £8,000 for the £1,000 consequential-loss award: [2002] EWCA Civ 673. It refused the claimant’s other applications and declined to remit the matter.
• Bristol County Court (Technology and Construction Court) — Jacob J awarded £24,572 for reinstatement and £1,000 for consequential loss after liability had been admitted.