Trespass and ‘hypothetical negotiation damages’

In London Borough of Enfield v Outdoor Plus Ltd [2012] EWCA Civ 608, [2012] All ER (D) 87 (May) the Court of Appeal held that, when assessing damages for trespass to land, the Court must start with the admitted trespass and then construct a hypothetical negotiation between the claimant and the defendant for the purpose of ascertaining the value of the benefit of the trespass to a reasonable person in the position of the party who has committed the trespass.

The facts

The claimant local authority brought an action in trespass in respect of two advertising hoardings which had been intended to be erected entirely on the land of a Mr Shah but in fact part of the hoarding support structure extended by about 2 ft on to land that belonged to the claimant. The claimant was initially unaware of the trespass, but some years later, after discovering the true position, brought a claim for damages to be assessed by reference to the fee which would have been agreed by the parties, in a hypothetical negotiation, as the value obtained by the trespasser as a result of the use of its land.