News
21 September, 2026
Supreme Court refuses appeal in Rogano restaurant dispute – Forthwell Limited v Pontegadea UK Limited [2026] UKSC 33
The Supreme Court has issued its decision in Forthwell Limited v Pontegadea UK Limited – [2026] UKSC 33. The case concerned liability for repairs and lost profits at the Rogano restaurant in Glasgow. Forthwell was the only Scottish appeal heard by the Supreme Court during its visit to Glasgow in May this year. Although the case settled shortly before the hearing, the Supreme Court heard the appeal given the wider importance of the issues raised. Giles Reid was junior counsel for the successful landlord.
In Forthwell the pursuer was the tenant of the Rogano restaurant. The restaurant suffered damage from water ingress in 2020. The pursuer brought a claim against the landlord seeking implement of the landlord’s obligation to restore the premises. The restaurant itself was operated by a third-party licensee in the pursuer’s company group, Lynnet Leisure (Rogano) Ltd. The pursuer also attempted to recover Lynnet’s loss of profit for the period in which the restaurant was closed. The defender argued that this loss was not recoverable in as a matter of law.
The decision concerns the circumstances in which a pursuer can recover a third party’s losses in an action for breach of contract. The Supreme Court, refusing the pursuer’s appeal from the Inner House, held that earlier Scottish authorities had been wrongly decided in holding that a pursuer generally may sue for a third party’s loss where that loss would otherwise not be recoverable (sometimes terms a legal ‘black hole’). The Supreme Court clarified that the ability to recover a third party’s loss is a narrow exception to the ordinary position where privity of contract prevents recovery. In Scots law, recovery will only be possible on the so-called ‘narrow ground’ where damage is caused to property that is intended to be transferred to a third party. The Supreme Court left open the question of whether recovery on the so-called ‘broader’ ground (where it is parties’ intention that a contract will confer a benefit on a third party) forms part of Scots law or English law.
The Supreme Court’s decision is a significant development of the law in this area. It is the first time that the Supreme Court or House of Lords has considered the recoverability of such losses in Scots law. It will be of considerable importance to those advising on breaches of contract and, in particular, on claims involving damage to property.