The Doctrine of Loss of Chance: Recent Developments

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The Doctrine of Loss of Chance: Recent Developments

Published 6 April 2020

The doctrine is used to determine causation and assess damages in cases where the claimant has lost the opportunity to pursue a course of action, which they contend would have been pursued and had a “chance” of achieving some (usually monetary) benefit. Common examples are “lost litigation” cases where a claimant has lost the chance of pursuing another party and “lost transaction” cases where a claimant asserts they missed out on securing a better deal with another, because of negligent solicitors’ professional advice.

Loss of chance cases are assessed in two stages. The claimant is subject to the usual “but for” test on the question of whether the chance would have been taken in the first place, but for the breach and will need to establish they would have taken the chance on the balance of probabilities. However, the courts diverge from the “but for” test when assessing the prospects of a claimant being successful in recovering a benefit against the third party. This is because the evidence required by the claimant to prove (but for the breach) they would have secured some benefit, is outside the claimant’s knowledge and control and the third party would have to speculate on the hypothetical outcome which would have been dependent on a different set of facts. This is referred to as the “counterfactual”, in effect, predicting the past.

If the court accepts the chance would have been taken by the claimant and the prospects of securing some benefit were “real and substantial” by reference to the doctrine in the Court of Appeal decision of Allied Maples Group Ltd v Simmons and Simmons [1995] 1 W.L.R (more than 10% chance of securing a better outcome), the court then calculates damages based upon the chances of success in percentage terms. For example, if the court assess a claimant’s chances of securing £500,000 damages in the “lost litigation” at 40%, then the claimant would receive £200,000.

Recent Supreme Court Decisions

In 2019 the Supreme Court reviewed the application of the loss of chance doctrine and how the doctrine is to be applied in the particular circumstances of two cases of “lost litigation”. Both claims related to claimants who had suffered vibration white finger through working as miners. Within the primary claims against the British Coal Corporation, the two claimants were not advised by their solicitors to claim for “services”, being the inability to perform day-to-day household activities due to the injury and they sued for the lost chance to pursue this head of loss.

In Perry v Raleys Solicitors [2019] UKSC 5 the court considered the approach to be adopted in a “lost litigation” claim which the defendant solicitors argued should not have been pursued. The court confirmed that “nuisance value” claims fall outside of the doctrine of loss of chance as do dishonest claims and in determining whether the claimant’s claim would have been honest, this is subject to the normal standard of evidence in civil litigation, being on the balance of probabilities. Such evidence falls within the claimant’s own knowledge. The court held that, in this case, the claimant could not have honestly pursued a lost claim and as a result concluded that he would not have pursued the claim.

In Edwards (on behalf of the estate of the late Thomas Arthur Watkins v Hugh James Ford Simey Solicitors [2019] UKSC 54 the court dealt with the question of the value of “after available evidence” and the question of whether after acquired evidence could be used in the trial of the professional negligence action or whether the professional negligence action had to be decided on the facts and evidence as at the date when the underlying claim was lost. The court found that expert medical evidence obtained in defence of the loss of chance claim had no value in assessing the claimant’s prospects of success, because at the time of the loss, no such evidence would have been obtained and taken into account when assessing damages. This primary claim was being conducted within a claims handling agreement and not through conventional litigation, meaning the claimant did not have to undergo a detailed medical examination and therefore the loss of chance ought to be calculated based upon “the value of his claim under the Scheme as it would have been administered in accordance with its terms”. The findings in Edwards are of narrow application when considering the after the event admissibility of evidence, given the existence of a claims handling agreement under which the claim would have been administered and the “rough and ready” assessment under the scheme. The Supreme Court did not provide a more general view on the admissibility of evidence obtained after the date of the lost claim.

In exception to the findings in Edwards above, the courts have previously taken into account an “after-coming event” when adopting the normal principles of loss of chance would fail to do justice between the parties on a significant or serious scale. Whitehead v Searl [2008] EWCA Civ 285 concerned a wrongful birth case where the principal losses were past and future care for the child by the mother. Due to the negligent delay of the mother’s solicitors in progressing the case to trial, the mother committed suicide before future care costs would have been awarded. The Court of Appeal found that the mother’s solicitors should not be held liable for securing the claimant (the estate of the late mother) an uncovenanted benefit in circumstances where a narrow application of restitutio in integrum (putting the claimant back in the position which would have prevailed had no injury been sustained) would produce a windfall for the claimant.

Key points

Whilst the Supreme Court judgments reconsidered elements of the Allied Maples test, the judgments in both cases are confined to the circumstances of the case. Clarification was provided that a “lost litigation” claim is no different from any other claim for the loss of chance and the examination of the underlying facts in order to decide whether the claimant has lost anything of value. Further, there is a presumption that such claims will be pursued on an honest basis.

The application of the loss of chance doctrine has faced criticism as it has the unsatisfactory result that a claimant may recover damages in circumstances where such damages would not have been recovered in the underlying transaction or claim and a claimant may be considered to be better off than they would have been had there been no negligence by the solicitor. Against this, policy considerations have been advanced to support such an approach as, but for the application of this doctrine it would be too easy for allegedly negligent solicitors to raise complete causation defences, particularly in circumstances where it may be impossible for the claimant to obtain witness evidence or documents which would have been available at an earlier trial and which are no longer available.