Kinch v Rosling & Ors

Damages for deceit are assessed to place the claimant in the position that would have applied had the representation not been made. Recoverable consequential losses may include losses that were not reasonably foreseeable, provided they were caused by the deceit. Where the precise amount of loss cannot be calculated reliably, the court may adopt a broad assessment. General damages may also be awarded on a modest scale for humiliation, distress and anxiety caused by consequential bankruptcy. Interest may be adjusted in accordance with an effective offer under Part 36.

The claimant obtained judgment in deceit against the first defendant, a solicitor, on 23 June 2008. Following an unsuccessful application to set aside that judgment and an interim payment of £250,000, the court assessed damages. The claim arose from advance-fee fraud representations that funds would be available to finance the claimant’s proposed acquisition of control of Leicester Football Club.

The assessment concerned multiple heads of special damage, including payments made, professional fees, lost investments, share losses, trustee’s costs and the loss arising from premature surrender of an investment bond. The claimant also sought general damages for the distress and anxiety resulting from bankruptcy.

1. Assessment of deceit damages. Damages for deceit are intended to place the claimant in the position he would have occupied if the representation had not been made. Consequential losses caused by the deceit are recoverable even where they could not reasonably have been foreseen, applying Doyle v Olby (Ironmongers) Ltd [1969] 2 QB 158 at 167.
2. The claimant established the principal heads of special damage. They included sums paid to the defendant solicitors, losses connected with the proposed acquisition, lost share value, trustee’s costs and the loss resulting from the premature surrender of the Scottish Mutual Bond.
3. Where precise calculation is difficult, the court must take a broad view. The court accepted a fair assessment of £18,976 for the lost gain on the bond, rather than requiring impossible precision.
4. General damages may be awarded on a modest scale for humiliation, distress and anxiety caused by the consequences of deceit, including bankruptcy. The assessment is necessarily broad. The court relied on Saunders v Edwards [1987] 1 WLR 1116 at 1128C-H and A v B (Damages: Paternity) [2007] 2 FLR 1051 at paras 54–57, and awarded £10,000.
5. Interest was allowed at 8 per cent up to 17 August 2008 and at 10 per cent thereafter. The higher rate reflected expiry of an offer made under Part 36 and was awarded pursuant to Part 36.14. The total damages, interest and costs were summarily assessed, subject to deduction of the £250,000 interim payment.