When distress does not pay

District Judge Peter Glover highlights why distress and inconvenience caused by a breach of contract will probably go uncompensated

When their train failed to stop at Hampton Court and instead delivered them to Esher, after midnight, the Hobbs family faced a five-mile walk home.

For this real and substantial inconvenience, the appeal court upheld an award of 8 damages for breach of contract, contrasting the Hobbs' experience with 'mere inconvenience such as annoyance and loss of temper or vexation (or disappointment)' for which no damages could be awarded.Pleasure an exceptionThe distinction drawn in that 1874 case (Hobbs v London and South Western Railway Co (1874) LR 10 QB 111) continues to concern the appeal courts in breach of contract claims, most recently in April this year.

The jurisprudence has been complicated by the ad hoc recognition of exceptional categories of cases to which the general rule will not apply.

These cases share a common ingredient in that they have for their very object the provision of pleasure, relaxation, peace of mind, or freedom from molestation.

The best-known examples are concerned with unsatisfactory holidays, spoilt wedding arrangements and solicitors' failures to obtain injunction orders.

But the general rule of no damages has been upheld in respect of claims arising from harsh and humiliating dismissals from employment, negligent building surveys and work, breach of the covenant for quiet enjoyment contained in a lease, failure to properly repair a Rolls Royce car which its owner had bought for pleasure and prestige and an architect's failure to realise the expectations of clients in designing their dream home.Bad policyThe general rule is founded on considerations of policy which were most recently summarised by Mummery LJ as part of the majority in the Court of Appeal in Farley v Skinner (2000) The Times 14 February.

Claims for damages for distress, inconvenience, disappointment etc (described by the judge as 'intangible harm') are fundamentally subjective.

Their extent or weight cannot be measured against any objective or solid criteria.

They would require an unacceptable level of subjectivity on the part of the judge and, if permitted, would endanger the operation of a fair and workable litigation system by introducing a wholly unpredictable factor into issues of both liability and quantum.

The judge at first instance had attempted to measure the unmeasurable to compensate for the uncompensatable, a process described as 'more of a lucky dip than a judicial process'.Strong words, but the operation of the rule has for many years caused judicial consternation, particularly in those cases where the apparent, and often admitted, default has not given rise to any physical damage or pecuniary loss.

The prime example is claims arising from defective building surveys or building work.

In such cases the claimant is only compensated if the defect has led him to pay more for the property or work than its actual market value.

If that is not the case, then in the absence of physical discomfort or inconvenience, the claimant may recover nothing at all.The not so deep endNot surprisingly, this restrictive approach to the assessment of damages has encouraged judges to extend the ambit of physical discomfort or inconvenience and the categories of exceptional cases outside the rule.

In Ruxley Electronics v Forsyth (1996) AC 344 HL, builders provided their client with a perfectly serviceable swimming pool, but the diving end was not as deep as the contract had specified.

The client sued for the cost of rebuilding the pool which would amount to more than 21,000.

The judge at first instance rejected that claim, but awarded the client damages of 2,500 for loss of amenity.

The Court of Appeal reversed the judgment, but was itself reversed by the House of Lords.

The amenity award was not in issue on either appeal, but two of the law lords commented on it.

Referring to two of the best-known holiday cases, Lord Lloyd of Berwick explained that the trial judge had taken the view that the contract was for the provision of a pleasurable amenity.

He was entitled to do so, as the client's pleasure in his pool was diminished by the reduced diving depth.

This was 'a logical application or adoption of the existing exception to a new situation'.Trying to get physicalThe tension generated by the conflict between the operation of the rule and the need to provide a remedy on the facts of a particular case explains the extreme divergence of opinion in the Court of Appeal in Farley v Skinner.

The reported decision is of the second hearing of the appeal.

The first, before a two-judge court comprising Judge and Hale LJJ, was abortive because they disagreed.

The second, before Stuart-Smith, Mummery, and Clarke LJJ, produced a split decision applying the general rule and reversing the trial judge who had awarded the claimant 10,000 damages for distress and inconvenience.

Clarke LJ delivered a detailed and powerful dissenting judgment.The claimant had commissioned a survey report from the defendant and had specifically instructed him to consider whether enjoyment of the property would be compromised by aircraft noise.

The defendant reported that he thought it unlikely the property would suffer greatly from aircraft noise and negligently failed to ascertain that the property would, in fact, be substantially affected from time to time and especially at weekends.

Unhappily, the periods of greatest noise coincided with those when the claimant was most likely to be at the property and wishing to enjoy its tranquil grounds.

He asserted that aircraft noise was a real source of annoyance and discomfort to him.

At first instance, it was not suggested that the contract fell within an exceptional category.

The judge found that the claimant had suffered physical discomfort or inconvenience.

Clarke LJ agreed with him, but Stuart-Smith LJ could find no hint in the evidence of any such discomfort, commenting that the whole emphasis was on annoyance.

Mummery LJ concluded that the claimant's upset and annoyance at hearing the aircraft could not amount to physical discomfort or inconvenience, and could not be considered as 'mental suffering' arising from it.The majority agreed that the contract did not fall into any exceptional category.

This issue was to be determined by construction of the contract as a whole, rather than identifying one relatively minor aspect of the overall transaction which was of greater relevance to the enjoyment of the house than others.

This was not a contract the very object of which was to provide a particularly pleasurable result.

'Mr.Skinner was retained as a surveyor to inspect and report on Riverside House...

not...

to produce a result of rustic tranquillity' (per Mummery LJ ).Intellectual by-passesIt is axiomatic that hard cases make bad law.

It is suggested that, for the policy reasons outlined by Mummery LJ, the majority decision is correct and judicial ingenuity in constructing intellectual by-passes around the settled law is likely to promote only uncertainty for litigants and first instance judges alike.

The fact that senior judges are prepared to look for ways around a principle which they consider to result in occasional injustice suggests that this area of law is ripe for formulation by the House of Lords or consideration by the Law Commission.District Judge Glover sits at Dartford County Court