Williams & Ors v Glyn Owen & Co.

Where negligent legal advice deprives a claimant of the opportunity to serve a contractual completion notice, damages are assessed by reference to the financial consequences of proper advice, rather than by assuming one counterfactual outcome was certain. If the lost benefit depended on whether the notice would have produced timely completion, the value of that chance may be recovered. The court should assess the chance on the available evidence, even where estimation involves speculation, and apply it to the value of the resulting profit. The duty to mitigate does not ordinarily require proceedings against a third party where those proceedings cannot be assumed to be straightforward and the claimant’s chosen course was reasonable.

The appellants, farming partners, sued their former solicitor for negligence in connection with the purchase of a farm. The solicitor failed to advise them to serve a contractual completion notice when the vendor could not give vacant possession. Liability was established at trial and was not challenged on appeal.

The Recorder found that, if properly advised, the appellants would have served notice and terminated the contract if the vendor failed to complete. He awarded £591.75 plus interest, treating the principal losses as recoverable from the vendor and therefore subject to mitigation. The appeal concerned the proper assessment of damages for delayed completion, the value of any lost chance, mitigation, and consequential costs.

The appeal was allowed. The Recorder’s order was set aside and damages of £4,238 were substituted.

1. The only sustainable claim on the evidence was for loss caused by delayed completion. The appellants did not pursue, and on the available evidence could not establish, damages for paying too much for the farm, the non-existent cow premium, or the hefting payment.
2. The evidence showed that the market for suitable breeding ewes for the 1994 lambing season had been lost by the end of November 1993. Since a completion notice served on 12 November would expire on 3 December, the full lost profit of £10,594 could not be awarded as though timely completion had been certain.
3. The proper measure was the value of the chance that service of the notice would have caused the vendor to reach a binding agreement with the farmhouse occupier, and that the appellants would have been informed in time to buy breeding ewes. On the available evidence, that chance was assessed conservatively at 40 per cent. Forty per cent of £10,594 produced damages of £4,238. Although the assessment involved speculation, a further hearing would have been disproportionate.
4. The duty to mitigate did not require the appellants to sue the vendor before suing the negligent solicitor. The court applied the principle stated in Banco de Portugal v Waterlow [1932] AC 452 at 506: reasonable remedial measures suffice, even if the party in breach can suggest a less burdensome alternative. A claim against the vendor could not be assumed to be straightforward, and the solicitor’s own letter did not recommend such proceedings.
5. Walker v Medlicott [1999] 1 WLR 727 was distinguished. Its particular concern was the retention of adventitious benefits by beneficiaries where rectification proceedings were required, a feature absent here.
6. Clarke LJ added that no separate loss of opportunity to terminate had been established, since the appellants had not shown that, following termination, they would have sued the vendor and recovered the whole lost profit. Auld LJ agreed with the result and the reasons of the other Lords Justice. The costs orders might require reconsideration.

• Court of Appeal (Civil Division): Permission to appeal was granted on 11 July 2002. On 11 June 2003 the appeal was allowed, the damages order was set aside, and £4,238 was substituted.
• Llangefni County Court: On 20 August 2001 Mr Recorder Howells found liability against the solicitor but awarded £591.75 plus interest, with consequential costs orders.