Demonstrating that a solicitor or other professional has been negligent is often relatively straightforward. In the majority of our professional negligence cases, the argument is focused on the assessment of what has been lost. In some cases this is simple to work out, for example if a solicitor has failed to account for the proceeds of sale of a property or if a defective will has deprived a beneficiary of a specific legacy. But where there is any uncertainty about future or hypothetical events and outcomes, the law has evolved complex (and sometimes competing) rules to help judges decide what a Claimant should be awarded.
Similarly, the courts will rarely find a negligent professional responsible for all of the consequences of a decision based on negligent advice and it is our job to ensure that the Claimant recovers as much as the law permits.
Common approaches by the courts to the assessment of damages include:
1. Loss of chance/Loss of opportunity
Often a solicitor’s negligence will have deprived a Claimant of the chance or opportunity to do something, for example to bring a damages claim or buy an investment property. Because the event has not yet occurred, and the likelihood of it happening would have depended on the acts of a third party, the courts will assess the chance of that event occurring as well as considering the possible financial benefit that it might have brought the Claimant. So if a solicitor negligently allowed a claim for damages to be struck out, the court will assess the claim against the solicitor by considering how likely it was that the original claim would have been successful, as well as by looking at the amount that the Claimant might have been awarded.
2. Diminution in value
More often than not a transaction will go through but there are problems affecting the value of what has been purchased. In these cases, the court will generally look at what the Claimant thought they were buying and compare the value of that asset with what they ended up with. The rules concerning the comparison of these two values and precisely what is taken into account can become extremely complex.
3. Cost of cure
Where the problem affecting the value of an asset can be cured by a sum that is less than the “diminution in value”, this will invariably form the basis of the Claimant’s loss.
4. No transaction
Less frequently, the court will find that a solicitor’s negligence caused a transaction to occur. When losses are attributed to a solicitor’s negligence, the Claimant will be awarded the costs and expenses incurred by the Claimant for both entering into and getting out of the transaction (less any profits made). The court will not compensate the Claimant for losses incurred because the transaction was in other respects a poor deal.