John Ward, Partner at Brindley Twist Tafft & James, has successfully represented a claimant in a reported Fraudulent Misrepresentation case.

The case concerned the sale of a dental practice and the High Court awarded his client (the purchaser) damages for fraudulent misrepresentation.  The court found that the defendant fraudulently represented the level of turnover to the claimant during pre-contractual negotiations.

As recently reported in Practical Law, the court accepted the claimant’s evidence that she would not have entered in the contract had she been aware of the true position and accordingly  she was entitled to damages representing the difference between the price she paid for the practice and its true value at the sale date.  In addition, the claimant was entitled to compensation for consequential loss caused by the misrepresentation.

Damages have been awarded in the region of £235K with interest at 4% over a period of around 10 years.

Practical Law stated that although the decision follows established principles, it is noteworthy because:

• It is a reminder that in cases of fraudulent misrepresentation damages are not limited by any remoteness principles. The claimant was allowed to recover consequential losses directly flowing from the fraud, regardless of whether these were foreseeable or not.
• The court held that the principle established in the contract case of British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways Company of London Ltd [1912] AC 673, that benefits gained as a result of taking reasonable steps to mitigate loss must be brought to account when calculating loss, also applied when calculating damages in tort.

Full details of this case can be found on the British and Irish Legal Information Institute website.

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