In a legal transaction a solicitor should advise the client on all information, that the solicitor should have gleaned from due diligence, that might have a bearing on the price the client is paying for the property.
This is to give the client the opportunity to pull out or renegotiate the price if there is anything untoward that the solicitor should have found out about.
In Bacciottini & Anor v Goldsmith [2014] the property had been a barn attached to a hall.
The 1974 planning permission for conversion of the barn to a dwelling contained a condition that “the converted barn shall be used only as ancillary accommodation solely in conjunction with the occupation of Snape Hall as a single private dwelling.”
The solicitor who dealt with a later £575,000 purchase of the property failed to tell the buyers about the restriction.
Without the restriction the property was in fact then worth only about £550,000. With the restriction it was only worth £450,000.
That the court found it worth as much as that may seem strange. Now owned separately from the Hall the condition precluded it being lawfully occupied as a dwelling since it could no longer be occupied as part of the Hall as the condition required.
The High Court accepted that the solicitors had breached their duty in failing to provide the information that would have enabled the buyers to renegotiate the price before committing themselves to the purchase. Indeed the solicitors accepted this too.
However the court was far from convinced that the negotiations would have got the price down to anywhere near £450,000 not least because getting the restriction lifted was a relatively simple matter. In fact after discovering it the buyers had no choice but to do this. For one thing they had a legal duty to try and reduce or mitigate their loss and applying to get the restriction lifted was part and parcel of that duty.
Their application to lift the condition had been successful in November 2009. Nearly all the loss they had suffered had been eradicated by that mitigation.
The court agreed with the defendant solicitors that the buyers’ actual loss was a mere £250 and awarded that as damages.
This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.
Original article: Losses of solicitor’s negligence largely cancelled by buyers’ damage reduction work.