Maden v Clifford Coppock & Carter (A Firm)

Where separate acts of negligence by different defendants cause distinct losses, a prior recovery from one defendant does not necessarily reduce damages for a later, self-contained loss caused by the other. A loss already compensated cannot ordinarily be recovered again, but an earlier settlement may be irrelevant where the claims and heads of damage are unrelated. In assessing damages based on a hypothetical settlement, the claimant must prove what he would have done on the balance of probabilities. The court must separately assess the prospects of the other party accepting the settlement. Unless that prospect is certain or very close to certain, damages must be discounted to reflect the chance that settlement would not have occurred.

The respondent purchased land intending to develop it. He later brought separate proceedings arising from the purchase and from the conduct of litigation concerning adverse possession of part of the land. The earlier claim against the purchase solicitors settled for £100,000. The later claim against Clifford Coppock & Carter concerned negligent advice about the effect of payments into court on liability for costs.

The Deputy Judge found that competent advice would probably have led to settlement of the adverse possession proceedings for £20,000 plus costs. He awarded damages without taking the earlier settlement into account. The appeal concerned whether that resulted in double recovery and whether the damages should have been discounted for the chance that the hypothetical settlement would not have occurred.

Lord Justice Neuberger gave the judgment, with Sir Martin Nourse and Lord Justice Sedley agreeing.

1. Separate losses and prior recovery. The first ground of appeal was dismissed. Although a loss compensated in one set of proceedings cannot normally be recovered again, the assessment depends on the particular facts. The negligence of Clifford Coppock & Carter was a later and separate act which caused losses that would not have been suffered if competent advice had been given. The earlier settlement with the purchase solicitors was therefore res inter alios acta as between the claimant and Clifford Coppock & Carter. The claimant was entitled to retain the £100,000, and it did not reduce the damages attributable to the later negligence. If the claims had been heard together, the proper approach would have been to identify and remove the losses caused by the later negligence before assessing the losses attributable to the earlier negligence.
2. Settlement evidence. The court additionally stated, obiter, that evidence from the purchase solicitors’ solicitor about the reasons for the earlier global settlement was inadmissible for determining the present claim. A settlement should generally be assessed by its objective terms and the material communicated between the parties, rather than private or second-hand accounts of their motives. If apportionment had been relevant, the Tomlin order and pleadings would have required an objective commercial assessment. Even an express apportionment would not necessarily have been conclusive against a third party.
3. Loss of a chance. The second ground was allowed in part. Applying Allied Maples Group Limited v Simmons & Simmons [1995] 1 WLR 1602, the court had to ask what would have happened if correct advice had been given. The claimant had to establish on the balance of probabilities what he would have done. Because the other party to the hypothetical settlement was not before the court, the court also had to assess her prospects of accepting the proposed terms. Unless settlement was certain or very close to certain, the damages required a discount for uncertainty. The Deputy Judge’s finding that settlement was probable did not remove that uncertainty. The Court of Appeal assessed the chance of settlement at 80% and reduced the damages by 20%.
4. Disposition. The appeal was allowed to that extent, with the damages reduced by 20%.

1. Court of Appeal (Civil Division): In [2004] EWCA Civ 1037, the court dismissed the double-recovery ground, allowed the loss-of-chance ground in part, and reduced the damages by 20%.
2. High Court of Justice, Chancery Division, Leeds District Registry: Mr Recorder Allen QC, sitting as a Deputy Judge, gave judgment on 28 November 2003 for the claimant and awarded damages arising from negligent advice during the adverse possession proceedings.