The Court of Appeal has given some helpful guidance on the approach to assessing damages for deceit: MDW Holdings Limited v James Robert Norvill (& Ors) [2022] EWCA Civ 883.
While the decision arose in respect of the acquisition of a private company and focused on the timing of when damages should be assessed in a breach of warranty claim, it will be of interest to financial institutions as a reminder of the court's approach to assessing damages for deceit, which is often relevant in the context of mis-selling disputes and shareholder claims.
The Court of Appeal recognised that a claimant who would not have made a purchase but for the deceit will be entitled to (at least) the difference between the price paid for the property and its actual value (if the claimant has suffered consequential losses, a higher figure may be payable). However, the court found that the same cannot be said for a claimant who would have proceeded with the purchase (albeit at a lower price) despite knowing the truth. In the latter scenario, the orthodox principle requires damages to be measured by reference to the difference between the price paid and the price which the purchaser would have paid had it known the truth.
For a more detailed analysis of this decision, please see our Litigation Notes blog post.
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