pnBlawg

the professional negligence blog

A collaboration between Rebmark Legal Solutions and 1 Chancery Lane

No dual test for remoteness, says the Court of Appeal

The test for remoteness in tort is damage that is reasonably foreseeable. However the test for remoteness in contract is damage that ought to be in the reasonable contemplation of the parties. There are differences between the two. Damage can be reasonably foreseeable (in which case it satisfies the remoteness test in tort) but also highly unusual or unlikely, such as a particularly lucrative contract (in which case it does not satisfy the remoteness test in contract). So where there are two concurrent causes of action, such when a professional is sued, which test should be applied to the damages claimed?   In Wellesley Partners LLP v Withers LLP [2015] EWCA Civ 1146 a three-judge Court of Appeal has held that, where the claimant has concurrent causes of action in both negligence and breach of contract against the defendant, it is the more restrictive contractual test for remoteness that will apply to any losses.     The facts concerned negligence in the drafting of a partnership agreement. The Defendant was supposed to draw up the agreement to provide for the investors’ capital to be locked in to the partnership for at least 42 months, to give the partnership time to work. In fact the agreement provided that investors could withdraw capital at any time during the first 42 months. An important investor withdrew a large sum of money during that time. The claim was that but for the negligence that allowed the investor to withdraw capital, there would have been enough money to enable the partnership to open a New York trading office which would have generated lucrative profits. At first instance, Nugee J held that the losses claimed were not recoverable under the contractual test for remoteness but were recoverable under the more generous tortious test, and that the Claimant was entitled to choose which test to apply when bringing the claim. Accordingly the claim succeeded. The Court of Appeal upheld the judgment but on different grounds. It held that when there are concurrent causes of action in contract and in tort, the contractual test for remoteness applies and the tortious test does not. However it also found that on the facts, the losses claimed ought to have been within the reasonable contemplation of the parties and so were recoverable notwithstanding that the more generous test of remoteness did not apply. The Court recognised that the decision might throw up some anomalies. It may give a client who receives free legal advice from a solicitor (who therefore does not have a contract with the solicitor) a more generous right to damages than someone who does have a contract. It may also mean that a client who sues a solicitor and a barrister for negligence may have a more generous claim against the barrister (with whom he does not have a contract) than he does against the solicitor (with whom he does have a contract). Roth J stated that he imagined that in such a situation, the contractual test for remoteness would apply but that this would have to be left to another case to be decided. In any event the case is a welcome clarification of the law.            

Will the introduction of adjudication in Professional Negligence cases have the same impact as the introduction of a similar scheme in the Construction Court?

On 1 February 2015 a voluntary pilot scheme for the adjudication of solicitors’ professional negligence claims was launched. Mr Justice Ramsey was to consider three test cases (with a quantum value of £100,000 or less) with feedback on those cases due to be provided by June 2015. It is now nearly November 2015, and not much has been heard: the latest update is that only one pilot case has been adjudicated upon, with the Adjudicator being 1 Chancery Lane’s Ivor Collett. There are presently no other pilot cases in train, but all signs point to determination that other pilot cases should be heard in the next few months. However, it was clear from the excitement provoked by the announcement of the scheme that there was an appetite within the industry for alternative means of dispute resolution for solicitor’s negligence claims. The confidentiality of adjudication proceedings are of great interest, particularly to defendant solicitor’s firms, for whom adverse publicity can be very problematic. No other legal sector has been as affected by the introduction of adjudication as the construction sector. Adjudication has been used as a form of dispute resolution for construction claims arising during or after completion of projects for many years pursuant to the statutory right to adjudicate under the Housing Grants, Construction and Regeneration Act 1996 (which was later amended by the Local Democracy, Economic Development and Construction Act 2009). Key advantages of adjudication (as applicable to professional negligence claims) are:  1. It is possible to obtain a reasoned judgment enforceable in Court for much lower cost than using Court proceedings. 2. The scheme can work with the pre action protocol claim and response letters as submissions from the parties. 3. The PNBA have appointed a panel of 5 adjudicators for the pilot all with many years of experience in this type of claim on standard terms of business and cost. 4. The scheme itself is designed as a precedent which can be adapted by agreement for individual cases – adaptations agreed will be useful in assessing the feedback. 5. Interlocutory points/preliminary issues could be adjudicated if a barrier to other forms of ADR like mediation and/or as a cheaper and quicker alternative to Court hearings. 6. The meeting and process could be agreed as similar to mediations at similar cost. Whilst the decision of an adjudicator is only temporarily binding, as Mr Justice Ramsey (a veteran of the introduction and expansion of the adjudication in construction dispute scheme) comments in his introduction, experience has shown that parties do not usually seek a final determination through the courts and accept the decision as a means of settling the dispute. The scheme is run along similar lines to that for construction disputes though there are some differences and, in particular, parties can adapt two aspects. The first relates to the binding nature of the decision and the second concerns costs:1. The parties can agree that the decision will be temporarily binding until it is finally determined (by litigation, arbitration or agreement) or they can agree that it will be finally binding. 2. If the parties so choose, the adjudicator will have power direct one party to pay the other’s reasonable costs and if appropriate can be given directions to enable him/her to determine those costs subject to a cap of £5,000. The parties can also agree for the adjudicator to have no such power and each party would therefore bear their own costs.Related disputes can be referred to adjudication together and a decision from the adjudicator is to be provided within 56 days of his or her appointment (which can be extended by agreement). The 56 day deadline is also applicable to the time between an adjudication being agreed upon as the way forward, as opposed to the rather more rigid 28 days in construction adjudications. It is hoped that the extra flexibility will make the scheme easier to prepare for. The pilot is not a statutory scheme. The Ministry of Justice will be involved in further discussions once the feedback has been analysed which will consider whether adjudication should be included as part of civil procedure in professional negligence claims. It may therefore be some time before the report into the pilot scheme is finalised. If the results are positive, and the scheme is expanded, it will be interesting to see if the impact on the professional negligence sector is as striking as in construction (where the number of construction disputes litigated in the Construction Court has dropped to 22% of what it was in 1995, when the scheme was introduced). My view is that while adjudication will undoubtedly assist the swift and ready resolution of some lower-value solicitor’s negligence cases, the very fact of those limitations will ensure that the impact is not as fulsome as has been noted in the construction sector. Until the result of the pilot scheme are released, the sector remains in the dark. 

Schubert Murphy v The Law Society

In Schubert Murphy v The Law Society [2015] P.N.L.R. 15 (QBD), Mitting J refused to strike out a claim by solicitors who alleged that it had suffered loss during a conveyancing transaction as a result of relying upon misinformation on the Law Society’s "Find a Solicitor" website. Someone calling themselves John Dobbs submitted and obtained a practising certificate to operate as a sole practitioner under the trading name of Acorn Solicitors. A Mr Khristofi decided to buy a house and instructed Schubert Murphy. The vendor was represented by Acorn Solicitors. Schubert Murphy checked the Solicitors Regulation Authority (SRA) and noted Acorn Solicitors were regulated. The Law Society’s practice note on mortgage fraud (dated 15 April 2009) urged solicitors as a matter of good practice to check their directory "Find a Solicitor" or the directory of Licensed Conveyancers if they were dealing with a firm they were unfamiliar with. During the conveyancing Acorn Solicitors gave the standard undertaking to discharge the existing mortgage out of the purchase monies paid by Mr Khristofi. Mr Khristofi moved into the house to discover the £735,000 purchase price had not been used to discharge the mortgage; Acorn Solicitors were a sham and the undertaking worthless. Mr Khristofi faced eviction proceedings by Lloyds Bank who held a first charge over the property. Mr Khristofi brought proceedings against Schubert Murphy (for negligence) which was settled. Schubert Murphy then brought proceedings against the Law Society for breach of statutory duty and/or negligent misstatement. The Law Society sought to strike out the claim on the basis it did not owe Schubert Murphy a duty of care. Mitting J refused to strike out the claim and held the matter should go to trial. The existence or not of a duty of care vested in the SRA in respect of its duties under ss. 10(1) and 10A of the Solicitors Act 1971 depended on an analysis of general factors and specific factors. Having regard to issues concerning the protection of the public a strike out was not appropriate as in theory if the Law Society was correct it called into question the security of current conveyancing practice. Furthermore that could be a factor in recognising the existence of a duty of care which coincided with the Law Society’s statutory duties when considering applications for the entry onto the Roll of Solicitors and their registration. This was because the Law Society, by encouraging members of the public to rely on its published information about who is a solicitor could be shocked to discover they had no route for recompense against a representative and regulatory body that held out a person as a solicitor on its website when in fact they were not. It is not clear from the judgment whether the Law Society’s website for its "Find a Solicitor" contained an appropriately worded disclaimer in 2010 when the fraudulent transaction occurred. It does now and includes the wording "Find a Solicitor is not intended to be the way in which the Law Society fulfils its statutory duties under the Solicitors Act 1974 to keep an official register of all solicitors available for inspection by the public" and goes on to advise viewers to inspect the official register. The Law Society contended that a body in its position and exercising a statutory duty owed no duty of care to those who may be injured economically by carelessness (relying on Yuen Kun-Yeu v Attorney General of Hong Kong [1988] A.C. 175). Mitten J held reliance on the case noted above was of little assistance as it did not establish that in no circumstances could a regulator not be responsible for economic loss. Further it was a not case where the Law Society made a representation or failed to exercise due care in an assessment of honesty or competence of "John Dobs", but instead it just entered his name on the Roll and register him as entitled to practise when if they had exercised proper care they would not have done so. Mitten J also held that in negligence claims generally there was no requirement that the act of carelessness giving rise to the claim must coincide temporally with the occurrence of harm. Furthermore in a representation case it did not matter the alleged carelessness happened at a time when the person to whom the representation was made was not personally in the contemplation of the defendant. Mitten J was concerned about the possible impact on conveyancing practise as in cases where solicitors are involved negligence can be rectified by a payment from the Solicitors Compensation Fund. However counsel for the Law Society submitted only where a solicitor gives an undertaking that fails will compensation be paid as there is no remit or obligation to make payments for failed undertakings given by people posing as a solicitor. So how does a member of the public or a solicitor obtain independent verification of the information on the "Find a Solicitor" website? The official register could be inspected and the Law Society telephoned. However the SRA will not necessarily release information about a person’s route to entry on the Roll on the basis of data protection principles. Should such a body like the Law Society be allowed to comprehensively disclaim responsibility for information when it urges the public to check the information it publishes and urges solicitors, as a matter of good practice, to also check? J Mitting gave judgment on 17 December 2014-does anyone know what is happening with this case?                

No duty owed by conveyancing solicitors to investigate the solvency of a vendor

No duty owed by conveyancing solicitors to investigate the solvency of a vendor: Karmjeet Singh Kandola v Mirza Solicitors LLP [2015] EWHC 460 (Ch) The High Court has recently dismissed a negligence claim brought against solicitors for the alleged failure to investigate the solvency of a party in the context of a property transaction.  The claimant, a businessman and owner of several buy to let properties, instructed the defendant firm in 2010 in relation to the purchase of a property.  The circumstances of the transaction were unusual, with the claimant paying the deposit of £96,000 to be held by the vendor’s solicitors as agents of the vendor (rather than as stakeholder).  Unknown to the defendant, the arrangement was intended to facilitate a loan by the claimant to the vendor.The defendant advised the claimant against proceeding in any event (on the basis that a former client of theirs had lost money in similar circumstances), although did not undertake further investigations into the vendor’s credit status.  Such searches would have revealed, prior to exchange, that a bankruptcy petition was outstanding against the vendor.  The claimant ignored the defendant’s advice and paid the deposit.  The vendor was subsequently made bankrupt and his solicitors struck off by the SRA for fraudulent missuse of client money.The key issue to be determined at trial was whether the defendant had owed a duty to (1) provide the claimant with specific advice as to the risk of a vendor becoming insolvent and (2) further investigate such risk by conducting bankruptcy and/or Land Registry priority searches on the vendor prior to exchange. HHJ David Cooke, sitting in the High Court, held that the defendant had not owed a duty in either respect: (1) The fact that the transaction had taken an unusual form did not justify the imposition of duties beyond the recommendations contained in the Law Society’s Conveyancing Handbook (which referred only to the need to advise a client as to general risks associated with the release of a deposit).  (2) The duty of a conveyancing solicitor is to “advise of the unusual risk, but not to seek to evaluate it unless specifically instructed to do so” [at 51].  Over and above this the scope of a solicitor’s duty does not include pursuing all lines of investigation that are open to him, merely those that he has been instructed to. (3) The above is particularly pertinent where, as in this case, advice is provided to a businessman with significant experience of property and/or financial transactions.  In this respect: “…the solicitor is not a guarantor of his client's subjective understanding, and will have fulfilled his duty if he gives an explanation in terms the client reasonably appears to him to be able to understand, and to have understood, even if the client later alleges that he did not in fact understand what was said” [at 47]. The judgement provides a succinct restatement of established principles. A solicitor owes a “nuanced” duty to advise on transactional risks based on an objective assessment of his client’s experience and understanding. Conveyancing practitioners in particular will be reassured to hear that, absent specific instruction, following guidance provided in the Conveyancing Handbook will usually suffice to fulfil their professional obligations.

Solicitors’ firms feel the pressure as professional negligence claims soar

The Solicitors Regulation Authority is considering launching judicial review proceedings against the Legal Services Board’s refusal to lower the minimum level of professional indemnity insurance cover to £500,000.      Coverage is a more pressing issue than ever given that, in 2013, the number of negligence claims brought in the High Court against solicitors increased almost threefold, according to figures from law firm RPC. The stark rise may be explained by a last-minute rush to issue claims 6 years after the 2008 financial crisis, however, and is unlikely to reflect a long-term trend.  

No duty owed by a valuer for a developer’s loss of profit or loss of a chance on subsequent sale

Freemont (Denbigh) Ltd v Knight Frank LLP [2014] All ER (D) 165 (Oct)    On 14 October 2014 Stephen Smith QC sitting as a Deputy High Court Judge in the Chancery Division handed down judgment on five preliminary issues concerning a multi-million pound dispute over an allegedly negligent valuation of a development site.    HELD, although a valuer owes concurrent duties in contract and tort to a developer, the developer's claim for loss of profit or loss of chance of a subsequent sale, were outwith the scope of the valuer’s duty.    The Facts    The Defendant valuer Knight Frank LLP (“KF”) had been instructed to value a plot of land, approximately 17 acres in size, on the outskirts of Denbigh, North Wales. The landowner was seeking finance to develop the land.   The valuation report was prepared for the purpose of supporting the landowner’s application for finance from the proposed lender. The valuer was aware of this purpose. The valuation was subsequently relied upon by the Claimant, Freemont (Denbigh) Limited (“Freemont”), as a minimum price to accept when selling the land.   A number of offers to purchase the land were made to Freemont. These fell below KF’s minimum valuation and so were rejected. The failure to obtain an offer in excess of the minimum valuation caused a delay in the sale of the land and as a result, the land fell into disrepair and significantly reduced in value.   Loss claimed   Freemont claimed that it suffered loss of profit (by not accepting one of the developer's offers) and claimed damages for the same, together with damages for all subsequent marketing costs and costs of future disposal of the Development (giving credit for any future sale). Further or alternatively, Freemont claimed that it had suffered the loss of a chance to sell the Development.    The Decision    Stephen Smith QC gave judgment on five preliminary issues directed by Master Price on 12 August 2013. The common law position on the duty of care owed by a valuer was summarised as follows:   (1)   A duty of care in tort is likely to be owed to the person for whom the report was prepared (even though a contractual duty may also be owed to the same party);    (2)   The duty of care in tort is likely to be limited to the purposes for which the report was prepared;    (3)   A duty of care in tort may also be owed by a valuer valuing premises for mortgage purposes (at least if they are modestly valued residential premises), to the purchaser of those premises, if        a.     The valuer knows that his report is likely to be shown to the purchaser, and      b.    The purchaser intends to use the premises for his own residential purposes, and not let them, and      c.     The valuer knows that his report is likely to be relied upon by the purchaser for the purpose of deciding whether to purchase the premises; but    (4)   A duty of care in tort is unlikely to be owed by a valuer instructed to produce a report for a lender for security purposes, to an investor who relies on the report for other purposes.   Of the above four propositions, the first three were well-settled. The fourth however, could not be regarded as settled before the Court of Appeal’s decision in Scullion v Bank of Scotland plc [2011] 1 WLR 3212. In Scullion, Lord Neuberger MR held that a valuer acting for a lender did not owe a duty of care to a borrower where the loan was for a buy-to-let investment property.   Applying the reasoning of Lord Neuberger in Scullion, Stephen Smith QC held that questions regarding the valuation of the land for sale purposes were “tricky” and he rejected Freemont’s contention that KF knew or ought reasonably to have known that it would rely on the report when considering whether to sell the land in the future. In this instance therefore, the duty of care extended only to the provision of a report for the purposes of securing finance. KF had not negligently valued the land at such a low figure that Freemont had been unable to obtain the financing it had negotiated (paragraph 148).   This case is welcome news for valuers and their insurers and shows that the Court will look to the purpose behind the valuation report and that reliance upon the report will be limited to the purpose of the valuation report.

TOWIE's Sugar Hut Costs Judgment

Sugar Hut Group & Ors v AG Insurance [2014] EWHC 3775 (Comm)   Mr Justice Eder today handed down his judgment on costs issues following his substantive judgment on the 20th October 2014 in the matter of the Sugar Hut Group v AG Insurance. The Claimants were ordered to pay the costs of the claim from the 14th June 2014, save for the costs of the discrete issue as to the amount of interest that was appropriate. They were also entitled to recover only 70% of their costs prior to that date, subject to a detailed assessment if not agreed. Permission to appeal the costs order was sought by Andrew Post QC on behalf of the Claimants, and was refused by the judge, who stressed that he had taken the view that the Claimants’ conduct was such that there was a very good reason for him to depart from the general rule about costs. He explained that the Claimants had plainly failed on certain issues which had led to a percentage reduction in their costs. In addition he wished to emphasize that he had awarded all costs of the action to the Defendant post the 14th June 2014 not merely because of the negotiations and offer letters between the parties, but also because the claim had very much been exaggerated and the Claimants had failed to comply with their disclosure obligations and other matters as set out in his substantive costs judgment. Mr Justice Eder stressed also in refusing permission to appeal that the case was one that was exceptional on its facts and turned on the specific conduct of the Claimants, such that there were no issues of general principle involved in his decision. I represented the Defendant (instructed by Caytons solicitors) on the permission hearing as well as on the substantive costs hearing and at the trial (where Richard Slade QC represented the Claimants). In his substantive judgment on costs, Eder J accepted my submission that the Defendant’s Part 36 Offer of the 23rd May 2014 did not attract the automatic consequences of Part 36, but that it could properly be considered under the court’s wider Part 44.2 discretion on costs. He recognised that there were a number of discrete issues where claims were maintained during the trial, but £Nil was recovered by the Claimants. The judge held that those issues involved substantial amounts of money, and also substantial time in disclosure and in lay and expert evidence. He also held that the Claimants’ attempts to argue that post-fire turnover (which occurred after the Sugar Hut nightclub came to feature on the popular TOWIE television programme) should be taken into account had been rejected in their entirety. Given the Claimants’ failures on these discrete and important issues a costs reduction of 30% was appropriate. In addition, the Defendant had made a Part 36 Offer in a letter dated the 23rd May 2014, which expressly based the offer on gross business interruption losses of £600,000, plus interest at 2.5%, producing a net Part 36 offer figure inclusive of interest of £250,000. In the event, the Claimants at trial recovered gross business interruption losses of just £568,000, albeit they persuaded the court to allow interest at 5%, such that there net recovery inclusive of interest was £277,000. The judge held that although the letter did not contain an admissible offer to settle or attract the automatic provisions of Part 36 (as I conceded), it could and should nonetheless properly be taken into account as a matter of conduct and in accordance with the wide discretion of the court. The judge held that the claim was very much exaggerated, and also accepted my submission that the Claimants had dragged their heels on disclosure and conducted the disclosure process on a piecemeal basis with fresh documentation still being disclosed just two months prior to trial. Even at trial, there were gaps in evidence, and the Claimants’ approach caused real difficulties to the Defendant in taking appropriate precautions to protect its position. He held that the Claimants’ response to the suggestion that business interruption was worth £600,000 was unreasonable, and for all of those reasons awarded the costs of the action from the 14th June 2014 to the Defendant, as well as making the separate 30% deduction for issue based costs from the period prior to that date.   As set out above, permission to appeal the costs order was refused. There has been no attempt to appeal the substantive judgement.

Law Society: Mortgage Fraud Practice Note Update

On 31 July 2014 the Law Society issued an updated practice note on mortgage fraud. http://www.lawsociety.org.uk/advice/practice-notes/mortgage-fraud/ There are no changes to the guidance.   The changes reflect updates to the law and publications. As of October 2013 the Serious Organised Crime Agency was replaced by the National Crime Agency. The Economic Crime Command is tasked with fighting economic crime including fraud and identity crime.

Adding a new cause of action after expiry of limitation

It is well known that a court can permit a party to amend its case to plead a new cause of action even though, had it been starting such a claim in freestanding proceedings, it may have been statute-barred. CPR 17.2 provides that the court “may allow an amendment whose effect will be to add or substitute a new claim, but only if the new claim arises out of the same facts or substantially the same facts as a claim in respect of which the party applying for permission has already claimed a remedy in the proceedings”.   What if the parties cannot agree as to whether the limitation period for the new claim has expired or not? Such a situation can arise where there is a dispute as to a claimant’s date of knowledge. In Chandra v Brooke North [2014] TCLR 1 Jackson LJ said (at paragraphs 65-67) that there are essentially two options. The court can treat it as a “conventional amendment application”. It will not descend into factual issues seriously in dispute, but rather will consider whether the defendant has a “reasonably arguable case on limitation”. If the court refuses permission to amend the claimant can issue fresh proceedings in respect of the new claim; the defendant can plead its limitation defence and the limitation issue can be determined at trial (often as a preliminary issue).   0 0 1 346 1973 1 Chancery Lane 16 4 2315 14.0 Normal 0 false false false EN-US JA X-NONE /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-parent:""; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin:0cm; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:12.0pt; font-family:Cambria; mso-ascii-font-family:Cambria; mso-ascii-theme-font:minor-latin; mso-hansi-font-family:Cambria; mso-hansi-theme-font:minor-latin; mso-ansi-language:EN-US;} On whom does the burden lie to prove or disprove the limitation defence? That was issue for the Court of Appeal in Mercer v Ballinger [2014] EWCA Civ 996. The Master of the Rolls decided that the burden was on the Claimant to prove that the Defendant did not have a reasonably arguable limitation defence. Thus he held (at paragraph 27): “The claimant is after all in effect inviting the court to make a summary determination that the defence of limitation is unavailable. If the availability of the defence of limitation depends upon the resolution of factual issues which are seriously in dispute, it cannot be determined summarily but must go to trial. Hence it can only be appropriate at the interlocutory stage to deprive a defendant of a prima facie defence of limitation if the claimant can demonstrate that the defence is not reasonably arguable.”

Equitable Compensation: AIB v Mark Redler in the Supreme Court

On 5 June 2014 the Supreme Court heard the appeal in AIB v Mark Redler. (Lord Neuberger, Lady Hale, Lord Wilson, Lord Reed, Lord Toulson) AIB v Mark Redler [2013] EWCA Civ 45 is often wrongly categorised as one of the recent spate of section 61 relief cases. It was a breach of trust case and although section 61 was pleaded in the defence it was not pursued. The solicitors accepted that they had been both negligent and unreasonable. No fraud was involved.  The solicitors acted for the borrowers and the bank in connection with a remortgage transaction of £3.3m. The bank required that the existing mortgage in favour of Barclays be discharged from the advance. The Barclays’ charge secured borrowings on two accounts. The solicitors obtained a figure to discharge the mortgage but failed to notice that it only related to one account. They paid £1.23 million to Barclays and the rest of the advance was paid to the borrowers. A further £300,000 should have been paid to Barclays. They borrowers defaulted. AIB’s charge was only registered two years later and as a second charge behind that of Barclays. HHJ Cooke determined two preliminary issues at trial: did the solicitors act in breach of trust by releasing the advance monies before obtaining a first charge; and if so, what remedy was the bank entitled to? He found that there was a breach of trust and that the proper measure of equitable compensation was the amount paid by the bank to discharge the Barclays mortgage when the property was sold, £300,000 and interest. AIB argued in the Court of Appeal that they were entitled to have the entire trust fund reconstituted less recoveries, i.e. the position it was in immediately before the breach occurred. LJ Patten considered that then equitable principles of compensation “have the capacity to recognise what loss the beneficiary has actually suffered from the breach of trust and to base the compensation recoverable on a proper casual connection between the breach and the eventual loss.” The Judge’s order in relation to the amount of compensation was affirmed. The Supreme Court has been asked to determine whether AIB is entitled to equitable compensation for the whole loan or whether the Court of Appeal’s analysis limiting the remedy to the amount of the bank’s actual loss was correct. We await the judgment with interest.