No continuing loss from law firm’s breach of contract, tribunal rules

Contract: Losses limited to breach

A trainee solicitor whose never took up his job after the terms of employment were changed four days before he began work has failed in his bid for damages greater than his contractual notice period.

Aleksandar Osvald sought to argue that he had “foreseeable and continuing” losses from Sussex firm Holden & Co’s implied breach of trust and confidence.

But Employment Judge Fiona McLaren held that Mr Osvald was only entitled to damages equivalent to four weeks’ notice, some £1,354.

As reported last year, the tribunal found the firm knew Mr Osvald had to work in its Hastings office for childcare reasons and yet, having agreed terms orally, put a clause in his contract – received only four days before he was due to start – that he would have to work at another office if required.

Judge McLaren held: “I conclude therefore that sending a written document which changed the place of work, albeit on an occasional basis, and refusing to alter this did amount to a fundamental breach of a term of the contract.

“This was sufficient to allow the claimant to treat the oral contract as at an end and resign.”

In the remedy ruling, the judge found that, although the oral agreement did not refer to a notice period, four weeks was the firm’s usual term.

But Mr Osvald argued that his losses did not stem from the dismissal. He submitted that managing partner Jolyon Holden never intended to honour the verbal contract and instead wanted to deceive him into signing a contract worded so as to breach the oral agreement.

This meant, he said, that the breach of the implied term of trust and confidence occurred when Mr Holden decided not to honour the contract, causing foreseeable and continuing financial losses.

Mr Osvald said it was foreseeable that he would not get a job comparable to the one he had left to take up the trainee role, “especially in the post-Covid economic downturn and in particular because of his age”.

Further, having to take legal action against the law firm meant the prospect of obtaining a job in the legal profession was unlikely and this was also foreseeable.

But Judge McLaren said that, although she had found Mr Holden’s evidence “contradictory”, it was “too big a leap to interpret Mr Holden’s as an active intention to breach the contract and to find that he had no intention of honouring the contract”.

This meant there was no breach of any implied term prior to the dismissal itself and so the losses could flow only from the dismissal and were therefore limited to the notice period.

UPDATE 7 August: Mr Osvald has contacted us to say that he has appealed the ruling.

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