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Disagreement with lawyers on damages estimate prior to serving the claim

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  • Disagreement with lawyers on damages estimate prior to serving the claim


    If someone could provide any advice on the below disagreement we are having with our solicitor, it would be extremely helpful:

    We bought our flat as a shared ownership using the government affordable home ownership scheme. We bought 80% of our flat for 150 000 GBP and 20% was owned by the housing association.

    A few years later we put our flat up for sale and accepted an offer but the sale didn't go through because defects were discovered in the buildings during that time. The builders and the new-built insurance both refused to cover the defects and owners were at risk of paying for the repairs. Banks refused to agree to new mortgages related to flats in our building and prospective buyers would get a NIL valuation for the flats.

    We had to move out at that time to go live closer to a sick parent but could not sell the flat or rent it out as renting out is not allowed in the case of shared ownership flats.
    To be able to rent out our flat and move out, we had to buy the remaining shares of our flat from the housing association. To do that, we had to order a market valuation for the flat and pay back the shares at the market price.

    We had our flat valued at 15 000 GBP because of the defective buildings and we borrowed 3 000 GBP from a friend to buy the 20% shares from the housing association, which they agreed to after examination of the valuation and the situation. We then rented out our flat and rented a new place.

    A year after, the insurer agreed to cover the building defects as the buildings was found not built in line with regulations.

    With a few other owners, we are suing the builders for selling us defective building and we are asking for damages compensation.
    For us the main financial damage is the cost of having to rent our new place instead of having been able to buy it as we originally planned if the sale of our flat had gone through as well as the inability to re-mortgage at a better rate.
    Our lawyers ordered a valuation for the claimantsí flats to quantify the losses and the valuation for our flat came back at 120 000 GBP (the insurance had agreed to cover the cost of the works since our previous valuation and the works have started although far from being completed and other issues have been found).

    They believe that because the housing association originally paid 30 000 GBP for the 20% of our flat but we bought their share back at 3 000 GBP, we have ďgainedĒ the difference, ie 27 000 GBP. Iíve been trying to explain to them that it doesnít work like that, itís not a loan and ¬*to buy back the 20% we wouldnít have paid the original 30 000 GBP but 20% of the market price of the flat.

    They believe this ďgainĒ should be deducted from the damages claimed to the builders by us.

    We do not accept this as we are losing money each month trying to make ends meet throwing away rent on the place we live in while having to pay for mortgage on our flat (the rent we receive doesnít cover the mortgage payment). Itís not like anyone gave us 27 k in cash but the lawyers think that way. Itís also really upsetting that our awful builders might benefit from the housing association loss.

    If the lawyers want to take into account the fact that we had to buy the shares back to rent out our flat, they should not only account for how much we paid to the housing association but also how much we lost in our flat value at that time. They shouldnít be able to quantify our gain based on one valuation and our loss based on another one.

    They donít take our calls and always gives updates at the last minutes so we and the other owners donít have any time to say what we want. They have already taken several decisions that was against what claimants wanted and some claimants have even dropped out as a result. It feels that because we arenít rich clients they donít care about us and do what is right and easy for them.

    Is there anything we can do to prevent them from deducting this supposed gain from the damages we are seeking? We have a court deadline soon when our lawyers need to tell the court the compensation we are asking for. We badly need the cash from damages to help us stay afloat and the works on the building are far from being done and we don't know if we will ever be able to sell our flat.

    Thank you very much.


  • #2


    • #3
      I do tend to agree with your position.
      If the boot was on the other foot would the HA be refunding you ?
      eg your property cost £150,000 of which 20% (£30,000) was purchased by HA with a buy back clause for you.
      If the property had been valued at £200,000 you would have paid 20% (£40,000) to buy out HA.
      If subsequently the property was found to be only worth £100,000 due to faulty construction would HA refund £10,000?

      I don't know what you can do about it, other than instruct your lawyers to carry out your wishes and claim as you instruct.
      You could remind them that if they do not carry out your instructions and it causes you loss (altho' how you would prove that is a bit of a mystery in this case)¬* you have reason to make a professional negligence claim against them.

      Solicitors must act in their clientís best interests, although they must balance this duty with the duties that they have to others such as the courts and others in the legal profession.
      However they should follow your instructions, as long as they are not illegal, but have a duty to advise what the consequences of your suggested course of action could be.

      In any event I do not see why the builders should gain from this.
      the builders (insurers?) pay out in full to the owners of the properties, and if the HA feel aggrieved it is for them to then sue you, the owner.

      Don't phone them...send email followed up by hard copy (send first class with free certificate of posting) if you intend to get forceful!


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