Claimants must mitigate their losses

The recent decision by the Court of Appeal in Bacciottini & Anr v Gotelee and Goldsmith reminds us that establishing negligence is not the only factor to consider when pursuing a claim for professional negligence.

In the Bacciottini case the claimants had instructed Gotelee and Goldsmith (‘G&G’), a firm of solicitors, in its acquisition of a residential property in 2007. The property was subject to a planning restriction which restricted its use to residential use connected with a neighbouring property. G&G admitted it had been negligent in this respect.

Bacciottini, quite rightly in an attempt to mitigate its loss applied to the local authority seeking the removal of the restriction. That application was successful and cost Bacciottini £250. The end result being that they owned the property without the restriction which is what they thought they had purchased in the first place.

Bacciottini pursued a professional negligence claim against G&G for the difference between the value of the property without the planning restriction and the value with the planning restriction as in 2007 when it was purchased. The sum of £300,000 was pleaded but the trial judge found that the difference in value would have been £100,000. However, the trial judge only awarded damages of £250 in respect of the costs of the application to remove the planning restriction as this was the only loss Bacciottini had suffered. Bacciottini appealed this decision, but the Lord Justice’s unanimously upheld the decision of the trial judge.

This case is a helpful reminder that damages for claims arising out of professional negligence will be assessed on the actual losses suffered by claimants as oppose to a notional or potential loss. The aim is to put the claimant in the position they would have been in but for the negligent act, not to put them in an even better position.

Further, it highlights the duty that claimants have to mitigate their losses. A claimant cannot simply say a mistake has been made and sit there and do nothing and expect to claim damages as a result. They must be proactive in taking steps to remedy the situation and reduce their losses.

Depending on your perspective you may think that such a view is unfair and places an unreasonable burden on claimant’s to resolve problems caused by those who were supposed to be helping and advising them and ultimately serves to reduce the amount of compensation to be paid. Alternatively you may agree and think that it would be unfair for the claimant in the case mentioned above to receive damages of £100,000 for an error which cost just £250 to fix. What is expressed clearly in the judgment is that each case will turn on its own facts and what burdens fall on the claimants will depend on what is reasonable in the circumstances.