The Supreme Court has handed down an important judgment in relation to the defence of negligence claims based on the loss of a chance. The case is significant because it considers whether damages for the lost opportunity to bring a claim should only be available where the ‘lost’ claim would have been an honest one. It also considers the circumstances in which an appellate court may overturn findings of fact by the trial judge.
The underlying lost opportunity related to a vibration white finger (“VWF”) compensation claim brought by a miner, Frank Perry. As a claimant with VWF Mr Perry was potentially eligible to claim general and special damages under a government compensation scheme. From the year 2000 the government compensation scheme also provided for special service awards where claimants could show that they were prevented from carrying out everyday tasks which they had carried out before developing VWF, such as gardening or DIY.
In 1999 and on the advice of Raleys solicitors Mr Perry settled his claim for general damages without making a separate services claim. In 2009, shortly before limitation expired, Mr Perry brought a professional negligence claim against Raleys alleging that they had failed to advise him in relation to a potential services claim following a change in the scheme. He claimed damages for the lost opportunity to bring that claim.
Immediately before the trial of the matter in 2015 Raleys’ insurer admitted negligence but defended the case alleging that the negligence did not cause Mr Perry any loss. Leeds County Court agreed and found that, on the balance of probabilities, Mr Perry would not have been successful in the ‘lost’ services claim. The reasons given by the court included a finding of fact that Mr Perry could not have brought an honest services claim. This finding arose out of the fact that, for reasons of consistency and efficiency, claims within the compensation scheme were not robustly reviewed. Instead causation was presumed so long as the claimant’s VWF was found to have reached a sufficiently serious level by a medical expert. The presumption that a claimant could not carry out certain tasks without assistance was subject to potential challenge on a second medical examination to determine whether any other comorbid conditions may have prevented the claimant from undertaking the task in question. Mr Perry had been examined by a medical expert who had concluded that his VWF met the threshold for the presumption in favour of a services claim. However, the trial judge favoured submissions that Mr Perry was not sufficiently disabled by the VWF and that existing back pain would have prevented him from carrying out the relevant tasks unaided in any event – as a result it was found he could not have made an ‘honest’ claim that his VWF would have made him eligible for a services claim.
Mr Perry appealed, and the Court of Appeal unanimously found that the judge had failed to ask the correct question; namely whether Mr Perry would have acted differently had he been properly advised. The Court of Appeal was highly critical of the trial judge for conducting a ‘trial within a trial’.
In turn the insurers for Raleys appealed to the Supreme Court. The Supreme Court, again in a unanimous decision, reinstated the first instance judge’s “detailed and lucid” judgment. It was Mr Perry’s complete lack of credibility as a witness which resulted in the Judge’s findings against him.
Causation in Professional Negligence Cases
The Supreme Court identified the common problems in assessing a financial benefit which a Claimant might have received. They described the determination of an alternative past event such as circumstances where no breach of duty had been committed as a ‘what-if scenario generally labelled the counter-factual.’ Similar difficulties arise in proving the likelihood of a future event.
In certain circumstances, when assessing both future and counter-factual scenarios the court will apply the concept of a lost opportunity or loss of a chance. In a case involving loss of a chance the court first assesses whether there is a real or substantial (and not speculative) chance of a third party taking a hypothetical action. If causation is established then the lost chance is quantified on percentage terms by reference to the likelihood of that chance occurring. The reasons for this are to avoid absurd results where a claimant with a 49% prospect of success may get nothing if the negligence of his or her solicitor prevents the claim proceeding. In reality such a claim may be settled because the claim still has substantial prospects or it might have been successful at trial, even if the claim was more likely than not to be lost.
Previous cases have set out a clear and common sense dividing line as to when the principle of lost chance is to apply: what the claimant would have done having received proper advice is to be proven on the balance of probabilities and what third parties would have done is to be assessed on the basis of a lost chance. The Supreme Court took the view that this was “sensible, fair and practicable”.
However, the Supreme Court clarified that even the adoption of a loss of a chance analysis did not mean that claimants were not required to prove that the breach of duty caused their loss.
Mr Perry’s case
Applying the facts of Mr Perry’s case the trial judge was entitled to conduct a trial of the issue as to whether Mr Perry would or could have brought an honest services claim. Whether Mr Perry could have brought an honest services claim was neither counter-factual nor determined by reference to a future event – his physical and medical condition at the time was a matter of fact known to Mr Perry and upon which the Court was entitled to make a finding on the balance of probabilities.
One of the criticisms made by the Court of Appeal was that the trial judge imposed a burden upon Mr Perry to prove not only would he have brought a services claim but that it would be successful. The Supreme Court disagreed that this was the trial judge’s intention and took the view that no such burden was placed upon claimant’s alleging a lost opportunity to bring a claim. This is an important clarification relating to the burden of proof which claimants must satisfy where a loss of a chance is pursued.
When considering whether an appellate court can over turn a trial judge’s finding of fact the Supreme Court found that the Court of Appeal was not correct that this was “one of those very rare cases where an appellate court should interfere.” The test remains that findings of fact may only be reversed if they are unsupported by the evidence and are critical to the decision, and in this regard, the Supreme Court stated that whilst the views of the court of appeal ere persuasive and forcefully expressed reasons why they may have come to a different decision, “the very stringent test for appellate court interference was not met in this case”.
This case re-affirms that the correct approach to ‘loss of a chance’ claims is to identify whether the decision is based on a counter-factual or future analysis; if so, the rules relating to lost chance may apply and in these cases it is not usual to conduct a trial within a trial. However, as in this case, if the issue to be determined is one which is factual and assessed on the balance of probabilities then that issue may be explored and subjected to the forensic vigour of a trial.
The case highlights the evidential difficulties which claimants often face in respect of causation where it is necessary for them to prove facts on the balance of probabilities. Claimants may be put to proof of all facts however historic.
One of the key issues in this case is that there was a less rigorous approach to compensation claims for VWF which meant that some claims which would not ordinarily have succeeded at trial will have resulted in claimants receiving compensation. However, where a claimant loses an opportunity to participate in the scheme this less rigorous approach to compensation does not assist them if their claim is not honest. The Supreme Court found that just as the nuisance value of a claim falls outside the scope of lost opportunity cases, so do dishonest cases. The Court stated that it “simply has no business rewarding dishonest claimants”.