Liability – but only nominal damages – in yacht purchase negligence

7 August, 2014
by: Cripps Pemberton Greenish

The law firm Hill Dickinson LLP avoided paying substantial damages, despite being liable for professional negligence.

 

Businessman Michael Hirtenstein purchased a £3.6m yacht, relying on an assurance as to the condition of the yacht from its previous owner.  Within an hour of its purchase, the yacht suffered a major engine failure 12 miles offshore, and Mr Hirtenstein subsequently spent £360,000 on repairs.  

 

Hill Dickinson, wrongly had advised Mr Hirtenstein that Christian Candy had personally guaranteed the condition of the yacht, when no such guarantee existed. As a result Hill Dickinson accepted they were negligent in advising Mr Hirtenstein that a personal guarantee had been obtained.  

 

However, Hill Dickinson avoided paying substantial damages to Mr Hirtenstein.  Mr Hirtenstein purchased the yacht for approximately £3.6m, when the initial asking price was  €17m.  The High Court held he would have gone ahead with the favourable purchase anyway, whether a personal guarantee as to the yacht’s condition existed or not. Hill Dickinson’s negligence had not caused loss to Mr Hirtenstein, and as such only nominal damages were awarded.