No duty on an interdictee to “mitigate” by seeking recall: continuing wrong, damages and interest in wrongful interdict – McGowan v Springfield Properties PLC [2025] CSOH 81

Introduction

This Outer House decision of the Court of Session (Lady Haldane) arises from an action of damages for wrongful interdict following a high-profile dispute between a subcontractor, Martin McGowan (the pursuer), and Springfield Properties PLC (the defender), a housebuilder. After the pursuer raised health and safety concerns, notably asbestos on Springfield sites, Springfield obtained interim interdict on an ex parte basis (5 February 2016) to restrain further statements. In 2020 Springfield pled guilty to certain health and safety offences related to asbestos; in May 2021 the interim interdict was recalled of consent and decree of absolvitor was granted in favour of Mr McGowan in the interdict proceedings.

In 2024, the Inner House determined two matters of real importance: (i) the damages action was not time-barred, because insisting on an interim interdict is a “continuing act” for prescription purposes under section 11(2) of the 1973 Act; and (ii) the decree of absolvitor in the interdict action is conclusive between the parties that the interdict was wrongful (res judicata). The proof before Lady Haldane was therefore strictly confined to causation and quantum.

The key issues at proof were whether the wrongful interdict caused the pursuer (a) distress and inconvenience, (b) reputational damage, (c) loss of earnings – principally a significant “York” fibre optics subcontract opportunity on a loss-of-a-chance basis – and (d) loss of employability. A core defence was that any loss was due to the pursuer’s own conduct and, in any event, should have been mitigated by his seeking early recall of the interim interdict; the pursuer countered that mitigation does not apply because the wrong was continuing until recall, and the duty lay on the holder of the order to seek recall.

Summary of the Judgment

• Mitigation: The court rejected the defender’s mitigation case outright. Building on the Inner House’s “continuing act” analysis, Lady Haldane held there was no duty on the pursuer to mitigate by seeking recall whilst the interim interdict subsisted. Mitigation is an aspect of causation and only arises after a wrong is complete; here the wrong continued until recall.
• Credibility and evidential fairness: The court broadly accepted the pursuer, his wife and son, the forensic accountant (Mr Bell), and Mr Charles Ruddy (McNicholas). Material parts of Mr Petticrew’s evidence (McNicholas) were set aside where not put to other witnesses and inconsistent with documentary and other reliable testimony. Attempts to suggest the key documents were a “sham” without pleadings were refused.
• Loss of a chance – the “York” subcontract: The court held the wrongful interdict caused the pursuer to lose a real and substantial chance to compete for and secure the York subcontract. Quantifying the chance globally at 66%, and adopting the mid-range profit scenario (Scenario B) from Mr Bell’s analysis, the court awarded £247,080 for this head (inclusive of the chance discount).
• Other heads: Distress, anxiety and inconvenience – £25,000. Reputational damage – £20,000. Loss of employability – £50,000.
• Interest: Applying orthodox Scottish principles, the court awarded past interest at 4% (half judicial rate) while losses accrued and 8% thereafter, with reasoned variations per head. The total award, including pre-decree interest calculations, was £558,033, with interest thereafter from date of decree at the judicial rate. Expenses were reserved.

Analysis

Precedents Cited and Their Influence

• Inner House decision (20 August 2024) in the same action
  • Continuing wrong: Insisting on interim interdict is a “continuing act” (1973 Act, s 11(2)). This was pivotal to rejecting time bar and now underpins the Outer House’s conclusion that mitigation does not arise while the wrong continues.
  • Res judicata effect of decree of absolvitor: It is conclusive that the interdict was wrongful, regardless of being of consent. This bound the parties and the Outer House, limiting proof to causation and quantum.
• Standard Chartered Bank v Pakistan National Shipping [1999] 1 All ER (Comm) 417
  • Mitigation as causation: There is no freestanding “duty” to mitigate owed to the wrongdoer. Rather, losses reasonably avoidable are treated as not caused by the wrong. Lady Haldane applies this orthodox view: the “wrong” here continued until recall, so the concept simply does not bite pre-recall.
• Sharp Corporation v Viterra BV [2024] Bus LR 871
  • Supreme Court statements re compensatory principle and mitigation affirmed the general framework within which Lady Haldane situates her reasoning.
• Bell v Inkersall 2006 SC 507
  • Ex parte interdict duty of candour: The court recalled the “stringent professional obligation” to disclose all relevant material, favourable or unfavourable. This context reinforced why, once interdict was later shown to be unsustainable, the onus to recall lay with Springfield.
• Oil States Industries (UK) Ltd v “S” Ltd 2023 SC 209
  • Contemporaneous documentation as best evidence. Used to weigh documentary correspondence about the York subcontract over late, unvouched assertions.
• Grier v Lord Advocate 2023 SC 116; [2022] CSIH 57
  • Fairness and the rule that significant contradictions must be put to witnesses; failure to do so may justify placing little weight on late, inconsistent testimony. This grounded the treatment of Mr Petticrew’s evidence.
• Centenary 6 Ltd v TLT LLP [2024] CSIH 13 / 2024 SLT 681
  • Loss of a chance methodology in Scots law. The court followed the approach that hypothetical acts of third parties are assessed for a “real and substantial” chance and quantified globally, not through binary balance-of-probabilities.
• Perry v Raleys Solicitors [2019] UKSC 5; Wellesley Partners v Withers LLP [2015] EWCA Civ 1146
  • Supportive authority on the “real and substantial chance” test for hypothetical third-party decisions.
• Wisely v John Fulton (Plumbers) Ltd 2000 SC (HL) 95; Interest on Damages (Scotland) Act 1958
  • Confirms the court’s power to award pre- and post-decree interest (s 1(1)).
• Farstad Supply v Enviroco 2012 SLT 348; 2013 SC 302
  • Judicial rate starting point; cautions against novel departures at first instance absent pleadings and evidence.
• Smith v Middleton (No 2) 1972 SC 30
  • One half judicial rate for past losses accrued over time; applied to non-pecuniary and pecuniary heads where appropriate.
• Sheridan v News Group Newspapers Ltd 2019 SC 203; Boots the Chemist Ltd v GA Estates 1992 SC 485
  • Principles on discretionary interest awards and the judicial rate as default, with timing guidance.
• Aird Geomatics Ltd v Stevenson [2015] CSOH 167 and Munro v Brown [2011] CSOH 117
  • Recognise distress and reputational loss as separate recoverable heads; provide benchmarks for non-pecuniary awards.
• A and B v C 2018 SLT 1194
  • Interest approach for a capitalised “loss of employability” type award.
• Eastern Motor Co v Grassick 2021 CSIH 67; Neil v McNair (1901) 3 F 85; Donald v Donald 1913 SC 274
  • Pleadings and procedural rules on challenging the authenticity of documents; the need for fair notice and, where relevant, pleas ope exceptionis. Used to reject any “sham document” insinuation.

Legal Reasoning

1) Mitigation in wrongful interdict: no duty to seek recall before recall

The defender’s core mitigation argument was that the pursuer ought to have sought earlier recall. The court decisively rejected this for two reasons:

• Continuing wrong: Per the binding Inner House analysis, obtaining and continuing to insist on an interim interdict is a “continuing act” until recall. It would be incoherent to require the victim to interrupt a continuing wrong (and it would render time-bar rules nonsensical). The wrongdoer bears responsibility to keep such an order under review and to seek recall if it ceases to be warranted.
• Mitigation is an aspect of causation: Applying Standard Chartered Bank, mitigation constrains recovery only for losses reasonably avoidable after the wrong is complete. That stage did not arrive until recall. Consequently, the “you should have recalled earlier” argument was legally unsustainable.

2) Credibility, reliability and procedural fairness

• The court accepted the pursuer, his family and Mr Ruddy as credible witnesses on the core issues. Mr Bell (forensic accountant) was considered particularly careful and cogent in method and reasoning.
• Late attempts to question the authenticity of the York correspondence without pleadings were refused. The court reaffirmed that serious challenges to documents require fair notice (and often specific pleas). “Not known and not admitted” is not a licence to insinuate sham.
• Unheralded documentary ambush was disallowed. The court reiterated the need for even-handed case management and fairness.
• Critical contradictions not put to earlier witnesses (notably around the York project timeline and signing authority) fatally undermined aspects of the defender’s case: following McKenzie/Grier principles, untested contradictions carried little weight.

3) Causation and quantification

• Distress/anxiety/inconvenience: The court found palpable impact over a 5-year period. Award: £25,000.
• Reputation: Despite the absence of media notoriety à la Munro, there was credible evidence of harm in the contracting community. Award: £20,000.
• York contract – loss of a chance: The court distinguished the (i) opportunity to quote via McNicholas’s onboarding process from (ii) the formal contract-signing phase for which different signatory authority applied. It accepted that the wrongful interdict caused withdrawal of the opportunity to proceed. With three competing potential subcontractors and pre-contract diligence to follow, the chance was not 100% but remained substantial. The court set it at 66% and applied Mr Bell’s mid-range margin (Scenario B), producing £247,080.
• Loss of employability: On a broad-brush basis, given the pursuer’s work history and the interdict’s stigma in the market, the court awarded £50,000.

4) Interest

• Starting point: judicial rate (8%). Departures must be justified, pled and evidenced (Farstad). Past losses spread over time generally merit half-rate (Smith v Middleton).
• The court:
  • Applied 4% during the period losses accrued and 8% post-accrual, tailored by head.
  • Calculated past interest in detail (e.g., on the York loss over 2.5 years of expected performance, then at 8%).
• Total award, including pre-decree interest calculations: £558,033, with interest from decree thereafter.

Impact and Significance

• Mitigation doctrine clarified for wrongful interdict: This judgment, read with the Inner House ruling, cements that an interdictee is under no obligation to seek recall to “mitigate” losses while a wrongful interim interdict subsists. The wrongdoer must keep the order under review and seek recall if not warranted. This will likely be cited frequently in wrongful interdict and other interim relief contexts.
• Time-bar and “continuing act” alignment: The Inner House’s continuing-act analysis dovetails with mitigation here, ensuring doctrinal coherence. It avoids the paradox of extinguishing the claim before it can sensibly be brought.
• Ex parte discipline: The reinforcement of Bell v Inkersall underscores the heightened duty of candour in without-notice interdicts. Failure to present relevant adverse material risks downstream liability and adverse inferences.
• Loss of chance in commercial loss: The court’s pragmatic global discount (66%) coupled with a mid-range profitability scenario provides a practical template for similar quantifications, and rejects simplistic reliance on HMRC “employment income” when the business model is dividend-based extraction from corporate profits.
• Evidential fairness: The judgment stands as a warning against late “ambush”, against raising sham/document authenticity theories without pleadings, and against failure to put critical contradictions to witnesses. Future litigants can expect little latitude for such tactics.
• Interest: The judgment applies the mainstays of Scottish interest law (8% default, 4% past accruals), and shows how to apportion in mixed non-pecuniary/pecuniary claims involving past and ongoing consequences.
• Practical consequences for holders of interim interdicts:
  • Maintain active review; move to recall promptly when facts change.
  • Anticipate that prolonged insistence may materially increase damages, including for reputational and market loss.
  • In-house and external counsel must ensure full and frank disclosure on without-notice applications.

Complex Concepts Simplified

• Interdict: A Scottish court order restraining someone from doing something; akin to an injunction. “Interim interdict” is temporary, granted often without hearing the other side (ex parte).
• Wrongful interdict: An interim interdict later shown to be unjustified. Damages may be awarded for losses caused while it was in force.
• Decree of absolvitor: A final decision in favour of a defender in the underlying interdict action. Here, because the defender abandoned the interdict action, the absolvitor in favour of Mr McGowan was conclusive that the interdict was wrongful.
• Res judicata: The matter has been finally determined between the parties and cannot be re-litigated.
• Continuing act (prescription): For time-bar, some wrongs continue each day they persist. Insisting on an interim interdict is such a continuing wrong until recall.
• Mitigation: Not a duty owed to the wrongdoer but a limit on recoverable loss as a matter of causation. It applies only after a wrong is complete. It does not require a victim to stop a wrong that is still being committed.
• Loss of a chance: Where the loss depends on hypothetical actions of third parties, damages reflect the percentage chance of the favourable outcome (if the chance is “real and substantial”).
• Smith v Manchester award: A broad-brush award reflecting reduced employability/disadvantage on the labour market; applied here by analogy to the pursuer’s market standing as a subcontractor.
• Plea ope exceptionis: A procedural plea to challenge a document’s validity or raise certain defences. Serious authenticity challenges generally require such a plea and clear notice.
• Judicial interest: The default rate (8%) applied to decrees, with a convention of half-rate (4%) for past losses accrued over time.

Key Quantifications and Orders

• Distress, anxiety and inconvenience: £25,000 (with past interest at 4%, then 8%).
• Damage to reputation: £20,000 (with past interest at 4%, then 8%).
• Loss of earnings (York subcontract, loss of chance): £247,080 (Scenario B, 66% chance) plus interest calculated as 4% over the expected 2.5-year accrual, then 8% thereafter up to decree.
• Loss of employability: £50,000 (with 4% during interdict; 8% thereafter).
• Total (including calculated pre-decree interest): £558,033, with further interest from the date of decree. Expenses reserved.

Practical Guidance Emanating from the Case

• Applicants for ex parte interdict must:
  • Disclose all material facts, including adverse ones (Bell v Inkersall).
  • Keep the order under continuous review and move to recall when unjustified.
  • Expect potential liability for extended periods if recall is not sought.
• Defenders to a wrongful interdict claim should not:
  • Argue “failure to mitigate” by recall where the wrong is continuing.
  • Attempt late document ambushes or raise authenticity/sham theories without pleadings.
  • Fail to put key contradictions to opposing witnesses – it risks their evidence being preferred.
• Quantification in contractor business models:
  • HMRC “employment income” may be a poor proxy where extraction is via dividends; forensic assessments should anchor on lost turnover and margins.
  • Loss-of-chance valuations should use realistic global percentages and sensible mid-range profitability, unless clear evidence supports extremes.

Conclusion

Lady Haldane’s judgment delivers a clear, principled and practical framework for wrongful interdict damages following the Inner House’s foundational rulings in this litigation. The major clarifications are:

• There is no obligation on an interdictee to mitigate by seeking recall while the interim interdict stands: insisting on the order is a continuing wrong; mitigation only applies once a wrong is complete.
• Holders of interim interdicts bear the responsibility to review and recall when not warranted; failure can materially inflate damages.
• In quantifying commercial losses, the court will adopt pragmatic “loss of a chance” methodology, anchored in sound forensic accounting and realistic discounting, rather than simplistic reliance on HMRC employment income figures.
• Evidential discipline matters: fair notice, candour and contemporaneous documents carry great weight; late objections and ambushes do not.
• Interest is approached orthodoxy: 8% judicial rate as the default, with 4% for past accruals, tailored sensibly across different heads.

In total, the pursuer recovered £558,033 (inclusive of pre-decree interest), with further interest from decree. Beyond its financial outcome, the case will stand as a leading reference on the interface between wrongful interdict, mitigation, and the continuing nature of interim injunctive relief, and on practical methods for assessing commercial loss where the core harm is the loss of a real and substantial chance.