Fairbrother & Anor v Gabb & Company (A Firm)

In a professional negligence claim, a claimant’s failure to accept terms offered by a third party does not necessarily break the causal chain. The court must identify the precise benefit or transaction which the negligence deprived the claimant of obtaining. Where the claimant could have obtained materially different terms only by exercising a lost legal right to apply to the court, the negligence may remain an effective cause of the loss. A claimant is not required to accept inferior or materially different terms merely to mitigate loss. The claimant’s conduct must be assessed in its full factual and legal context, including whether the proposed alternative would have provided the relevant security or benefit.

The claimants, who traded as GM and MM Express Parcels, sued their former solicitors for negligence and breach of contract. Liability was admitted. The solicitors had incorrectly advised them about the deadline for applying under Part II of the Landlord and Tenant Act 1954 for a new business tenancy after service of a section 25 notice.

The county court judge held that the solicitors’ negligence had not caused the claimants’ failure to obtain a new tenancy. He considered that the effective cause was the claimants’ refusal to accept the landlords’ proposed fixed-term lease. The claimants appealed. The central issues were causation, the effect of the claimants’ conduct, and the terms of the tenancy they would have obtained.

Appeal allowed. Lord Justice Clarke gave the leading judgment, with which Lord Justice Robert Walker agreed.

1. The preliminary question had been inadequately formulated. It was impossible to determine causation without identifying the nature and terms of the new lease which the claimants would have obtained.
2. The ordinary “but for” test is necessary but generally insufficient. Causation depends on the circumstances of the case and the application of common sense, as explained in Galoo Limited v Bright Graham Murray [1994] 1 WLR 1360.
3. The parties agreed that, had the claimants applied to the court in time, the court would have granted a three-year lease with a three-month break clause, operating at the third month and every three months thereafter, on the existing rent and service-charge terms. That was the tenancy the claimants wanted and could obtain only by making the application which the solicitors’ negligence prevented.
4. The landlords had not offered a lease containing an equivalent break clause after mid-September 1995. Their later formal position required either acceptance of the standard fixed-term lease or departure. The claimants were therefore not unreasonable or intransigent in declining those terms. Nor was it unreasonable to reject or fail to accept a tenancy at will, particularly since the solicitors had advised against it, no clear formal offer had been made, and it would have provided no security of tenure.
5. The causation question was accordingly answered in the affirmative. Question 2 was answered on the agreed basis of a three-year lease with the stated break clause. Question 3, concerning what the claimants would have done, was remitted with all remaining issues to the county court. Lord Justice Walker added that recovery of the whole pleaded loss was neither inevitable nor likely.

• Court of Appeal (Civil Division): allowed the appeal from the Worcester County Court, discharged the costs order below, reserved the costs of the hearing below to the trial judge, and remitted the outstanding issues to the county court.