Tracy Chambers v Secretary of State for Transport

Professional fees claimed as disturbance compensation must have been caused by the acquisition and must be reasonably incurred. The claimant must mitigate loss. Expenditure is irrecoverable to the extent that a reasonable person would not have incurred it.

A claimant need not retain the cheapest or local solicitor. However, recoverable conveyancing costs must remain proportionate to the value and complexity of the transaction. It will generally be unreasonable to incur overlapping costs of separate professional advisers where either could adequately perform the work, unless a distinct need for specialist legal advice is shown.

The claimant agreed to sell her home to the Secretary of State after it was affected by the HS2 scheme. The parties agreed the price and all compensation heads except the claimant’s solicitors’ fees.

Her surveyors had served the blight notice and negotiated the price and compensation. Their fees had been reimbursed. The claimant sought reimbursement of solicitors’ fees for legal advice and conveyancing totalling £12,682.20 including VAT, as disturbance compensation under rule 6 in section 5 of the Land Compensation Act 1961.

The reference concerned whether those fees were reasonably incurred and reasonable in amount.

1. The claim succeeded in part. The Tribunal awarded £5,200 plus VAT, totalling £6,240, for the disputed professional fees.

2. Under the principle of equivalence, disturbance compensation may include professional fees caused by an acquisition. But recovery is qualified by mitigation. The claimant may recover only expenditure which a reasonable person in her position would have incurred. The Tribunal applied the mitigation principle explained in Director of Buildings and Lands v Shun Fung Ironworks Ltd [1995] 2 AC 111.

3. The claimant was entitled to use the solicitors introduced to her and was not required to choose the cheapest or a local firm. Nevertheless, £4,809 plus VAT for an uncomplicated sale of a modest, recently built house was disproportionate. Unnecessary internal liaison and excessive client communication materially increased the time recorded. A reasonable conveyancing fee was £3,600 plus VAT.

4. The litigation-advice fees were largely unreasonable because the specialist surveyors were already conducting the compensation work and no issue requiring separate litigation advice was identified. It was not reasonable for one professional to duplicate another’s work. The Tribunal allowed £1,000 for initial advice and £600 for later advice concerning the compensation claim and the disputed transactional fees.

5. The parties were permitted to make further submissions on the costs of the reference, which the Tribunal would determine summarily.

The claimant referred the unresolved issue of recoverable solicitors’ fees to the Upper Tribunal under the sale agreement. No earlier judicial decision is stated in the judgment.