Solicitors' negligence

Citation

(1998), "Solicitors' negligence", Property Management, Vol. 16 No. 1. https://doi.org/10.1108/pm.1998.11316aab.017

Solicitors' negligence

Solicitors' negligence

Kennedy v. Emden, Jordan v. Gershon Young Finer & Green, Burdge & another v. Jacobs & others [1997]44 EG 201 CA. The appeals in these three cases all raised the same question about the amount of damages to be awarded in action against the defendant solicitors for negligence. Liability for negligence was not the issue in these appeals that had already been established. All of the plaintiffs had acquired the unexpired term of the leases of flats. Each had paid a substantial premium which was, at the time, unlawful under Part IX Rent Act 1977. The underleases were all protected tenancies and by virtue of s120( 1 ) and (2) of the Act the premiums could not be charged by the transferors of the under leases. The purchasers sued their respective solicitors for negligence and breach of contract for failing to point this out to them. However, by the time the actions came to court the amendment to s127 of the Rent Act 1977 was in force which abolished the restriction on premiums.

The plaintiffs argued that damages should be calculated on a diminution of value basis at the date of the breach, i.e. before the amendment to s127 came into force. The defendants argued that the plaintiffs' loss was nil since by the time of the trial the amendment was in fact in force.

The Court of Appeal held that to apply the diminution of value rule and the general rule that damages must be assessed at the date of the breach would be mechanistic. The purpose of damages is compensatory, to put the plaintiffs in the position they would have been if there had been no negligence by the defendants. Compensation is for real, not hypothetical damage and it is irrelevant that if the trial had been before the amendment to s127 of the 1977 Act damages would have included the recovery of the unlawful premiums paid. The appeals were therefore dismissed.