Batty v Danaher (Practising As Jack Danaher & Co)

A solicitor who negligently fails to pass on material information and advice is liable for foreseeable loss caused by that omission. Where the lost benefit is contingent, the claimant must prove on the balance of probabilities that the relevant step would have been taken, after which the court assesses the real chance of the beneficial outcome. Costs of consequential litigation may be recoverable where they fall within the scope of the duty, were caused by the negligence and are not too remote. Costs of an unreasonable appeal undertaken contrary to clear advice that it had no realistic prospect of success are too remote.

The claimant retained the defendant solicitor in connection with a service agreement under which he was employed as an adviser and consultant for five years. The claimant was suspended from work after illness and workplace disagreements. The defendant failed to bring important correspondence from the employer to the claimant’s attention and failed to advise him promptly that he should negotiate or return to work to protect his contractual rights.

The claimant subsequently brought Employment Tribunal and County Court proceedings, followed by an unsuccessful appeal to the Court of Appeal. The County Court and Court of Appeal concluded that the employer had been entitled to stop payment while the claimant failed to attend work. The claimant sought damages from the solicitor for the lost value of the service agreement and the costs of the proceedings.

1. Liability and lost contractual benefit. The defendant admitted that he should have advised the claimant promptly about the employer’s letters, the need for negotiations or a return to work, and the risk to the claimant’s contractual rights. The claimant proved on the balance of probabilities that, with proper advice, he would have declared himself ready and willing to return to work. The employer would probably have taken him back.
2. Applying the loss-of-chance approach in Allied Maples Group Ltd v Simmons and Simmons [1995] 1 WLR 1602, the court assessed the real possibilities rather than speculative ones. There was a reasonable but uncertain chance that the agreement would continue, or that the parties would settle on terms securing the claimant’s contractual entitlement. The chance of the claimant receiving the full value of the remaining term was assessed at 70 per cent.
3. The claimant was not required to mitigate by accepting other employment, establishing another business or risking capital in a business venture. His age, deafness, intended transition to retirement and limited realistic employment prospects were relevant. Damages were therefore awarded at 70 per cent of the gross remaining contractual value, less the appropriate tax deduction.
4. Costs of consequential proceedings. Consistently with South Australia Asset Management Corporation v York Montague Limited [1997] AC 191, the defendant’s duty covered foreseeable loss resulting from the failure to provide timely information and advice. The County Court and Employment Tribunal costs were caused by the negligence and were foreseeable. The defendant’s counsel’s subsequent advice did not break the chain of causation.
5. The costs of the Court of Appeal proceedings were not recoverable. The claimant had received strong and clear advice that the appeal had no real prospect of success, and it was wholly unreasonable to pursue it. The claimant therefore recovered the contractual-loss damages and the relevant County Court and Employment Tribunal costs, but not his own appeal costs. The claim succeeded, with total damages of £175,772.18 subject to the specified tax deduction.

The judgment records that the claimant’s County Court claim was dismissed by Mr Recorder Kealy, who held that payment could be suspended while the claimant refused to attend work, relying on Miles v Wakefield MDC [1987] ICR 368. The Court of Appeal, constituted by Ward, Sedley and Hale LJJ, upheld that decision and dismissed the appeal with costs. The present negligence claim against the solicitor succeeded.