"That don’t distress me much …"

31 July 2015

George Osborne's pledge to tackle the housing crisis, if acted on, should see an increase in housebuilding.

Developers will be sure to welcome such a result but might not be quite so happy about the potential rise in complaints – peak periods of construction often lead to an increase in defects and snagging items resulting from lower quality contractors.

This common complaint from developers has prompted us to take a look at how compensation for distress and inconvenience arising out of defects and/or snagging items is quantified.

This question was considered in West v Ian Finlay & Associates[1], a case in which a couple and their baby son were forced to move out of their home in order for major remedial works to be carried out by their contractor. The house required damp proofing works and the refitting of a new kitchen.

In its judgment the Court of Appeal made some useful comments on the amount that claimants are entitled to for distress and inconvenience arising out of breach of contract:

  1. Adjusted for inflation from the 2007 AXA Insurance UK plc v Cunningham Lindsay UK case, the maximum damages recoverable will generally be £3,000 per person per annum where there are no particular physical symptoms or illnesses caused by the breaches.
  2. A mother with small children will likely be entitled to higher damages per annum (albeit still within the £3,000 indicative maximum) as the defects and any remedial works will impact her more, given her concern for her children.
  3. A baby will be less affected than an adult or an older child and so will only qualify for a much lower level of damages.
  4. There was a suggestion that where a family has to move out of their home rather than live with the defects and the remedial works, then the damages should be lowered.

The level of stress and anxiety suffered by the family in West was judged to have been significant, but not at the top end of the £3,000 maximum, despite the fact that the Wests' baby had once passed out from inhaling paint fumes. The judgment awarded Mrs West £2,000, Mr West £1,500 and their baby son £500 per annum.

So whether or not George Osborne's promises in regards to housing are actually realised, at least developers can rest easy knowing they can determine realistic settlement sums should they find themselves facing unhappy purchasers.

[1] [2014] EWCA Civ 316