Assetco Plc v Grant Thornton UK LLP

For contributory negligence, a claimant’s fault must contribute causally to the particular damage claimed. The court must assess the reduction by reference to both the parties’ blameworthiness and the causative potency of their acts under section 1(1) of the 1945 Act. Fault that did not cause the relevant loss cannot affect apportionment.

The source of money used for expenditure does not itself determine the deduction. The relevant question is what caused the loss. Applying those principles, the deductions for wasted expenditure and the Jaras payment were each 25%.

In an earlier judgment, the court found Assetco Plc v Grant Thornton UK LLP liable in respect of claims arising from negligent failure to detect dishonest trading. The court directed that unresolved quantum issues could be determined separately.

The parties agreed the arithmetic but disputed the appropriate deduction for contributory fault. Grant Thornton contended that a 35% deduction applied to wasted expenditure funded from PSA monies and to the Jaras payment. AssetCo maintained that the applicable deduction was 25%.

1. AssetCo was entitled to damages of £22,363,273.50, exclusive of interest and costs.

2. Under section 1(1) of the 1945 Act, contributory fault must cause or contribute to the particular damage claimed. The assessment of a just and equitable reduction requires consideration of the parties’ blameworthiness and the causative potency of their acts.

3. The alternative PSA claim did not cause the wasted expenditure loss. The fact that some expenditure came from PSA monies described the source of the funds but did not alter the cause of the loss. The appropriate deduction was therefore 25%, not 35%.

4. The Jaras payment warranted the same deduction. AssetCo’s fault in relation to that transaction was no more causatively potent or blameworthy than its fault concerning the trading losses generally. Funding from PSA monies and the alternative PSA claim were irrelevant to the loss actually awarded.

5. Interest and costs were reserved for a further hearing if not agreed.

The judgment followed the court’s earlier decision in Assetco Plc v Grant Thornton UK LLP, [2019] EWHC 150 (Comm). It determined outstanding quantum issues by written submissions. Interest and costs remained to be addressed.