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But Why?

View profile for David Rogerson
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We always hear our kids say this when they cannot comprehend the unfairness of a situation. This sometimes happens in Professional Negligence cases and a good example is the case of BPE Solicitors v Hughes-Holland [2017] which was decided by the Court of Appeal last year.

The Claimant sought damages against his solicitors who had acted for him in drawing up a loan agreement. The Claimant had agreed to lend his friend £200,000 in the assumption that he would use the money to redevelop a disused tower block. In fact, the tower block was owned by his friend’s company and was subject to a charge securing a bank loan for £150,000. The Claimant’s friend was going to use the money to pay off the bank loan and other debts and not develop the tower block.

The Claimant instructed his solicitors to draw up a loan facility agreement and charge but the solicitors mistakenly inserted  terms which indicated the specific use of the loan monies, namely to fund the development of the tower block. As was probably inevitable, the tower block was not developed and the Claimant lost his money.

In the first instance court, the solicitors were held to have been negligent on the basis that had the Claimant not been misled by their mistake, he would not have made the loan. The claimant was awarded the full amount of the lost monies.

The Defendant solicitors appealed and the Court of Appeal reduced the Claimant’s damages to nil.

But Why? That does not seem fair.

The Court of Appeal actually dismissed the appeal but went onto hold that even if the loan monies had been used to develop the tower block, the value of the property would not have increased and the Claimant would still have lost his money.

As such, although the solicitors had been negligent and the claimant lost money this loss arose from his own commercial misjudgement rather than the solicitor’s failings.

Some Professional Negligence claims are not always as straight forward as you would think and it is not inevitable that you will recover money even where the Professional has been negligent.

Seek specialist advice by contacting David Rogerson at Chattertons 01636 675563 or david.rogerson@chattertons.com

 

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