West Law Report

Loss of chance in deceit

Posted in Times Law Report by mrkooenglish on June 26, 2008

From The TimesJune 23, 2008

Loss of chance in deceit
Chancery Division

Published June 23, 2008

4Eng Ltd v Harper and Another

Before Mr Justice David Richards

Judgment April 29, 2008

Damages for loss of a chance were recoverable in an action for deceit.

Mr Justice David Richards so held in the Chancery Division when assessing the damages recoverable by 4Eng Ltd on its claim in deceit against Roger Harper and Barry Simpson based on their knowledge of the falsity of a number of express representations contained in a share sale agreement on which 4Eng had relied in agreeing to purchase Excel Engineering, a company owned and managed by the defendants.

The claimant claimed damages, inter alia, for loss of opportunity to purchase and profit from another company, Tarvil Ltd.

Mr Clive Freedman, QC and Mr Ian Smith for 4Eng; Mr Tom Leech for Mr Harper; Mr Nigel Hood for Mr Simpson.

MR JUSTICE DAVID RICHARDS said that the defendants submitted that the claim involved an impermissible attempt to rely on two distinct strands of authority: damages for loss directly caused to the claimant and damages for a loss of chance.

A combination of such claims involved no error of principle. If the loss of the chance was damage directly caused by the defendants’ deceit, it was as much within the scope of damages for deceit as payments or liabilities in fact made or incurred by the claimant or as damages for the loss of profits in a hypothetical alternative business established on the balance of probabilities as in East v Maurer ([1991] 1 WLR 461). That decision predated Allied Maples Group Ltd v Simmons & Simmons ([1995] 1 WLR 1602) by four years.

It did not seem to be an objection that the loss was assessed as a loss of chance, not as a loss established on the balance of probabilities.

It was true that it did not previously appear to have been decided that damages for loss of a chance were recoverable for deceit, but there was no objection in principle. If damages for loss of a chance were recoverable in negligence, why should they not also be recoverable in deceit?

Solicitors: Reid Minty LLP; Daniel Berman & Co; Byrne & Partners.

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