Loss of Chance in English Law - Negligence

Negligence

While the award of damages in tort may protect pre-existing expectations (e.g. of earning capacity or of business profits), a claimant cannot be seen to benefit from the breach of the duty of care. The measure of damages is therefore to ensure that the claimant is "no worse off" having suffered the breach of the duty of care. In each case, the claimant must prove the cause of action on the balance of probabilities. For these purposes, the court is required to speculate on what would have happened had there been no negligence. In many cases, loss and damage might have been sustained even if all had gone as planned. But there might always have been a chance that no long-term loss and damage would occur. For example, a person may attend a hospital with an existing injury. The only effect of any negligence in the treatment may be that the patient loses the chance of a full recovery, i.e. what was merely threatened becomes inevitable. Thus, actions by claimants whose chances of recovery from illness or injury have been reduced due to the professional negligence of their doctors have failed when they could not establish that, with proper treatment, their chances of recovery would have exceeded 50%. In Gregg v Scott UKHL 2; 2 WLR 268 a man whose chances of surviving non-Hodgkins Lymphoma for ten years were reduced from 42% to 25% by a delay in diagnosis could not claim damages because his chances were already too slim for the delay to have worsened his position. This was complicated by the fact that the case was brought before the court following an extended delay at which point the plaintiff was still alive. In judgement this was cited as a significant weakness in his claim. The principle is that a claimant must have had a more than 50% chance of survival to establish causation in order to satisfy the balance of probability test. However, in some Australian states, claims for loss of chance have been succeeded in medical negligence cases: e.g. Rufo v Hosking (2004) NSWCA 391. Their approach argues that a patient would rather have a 42% than a 25% chance of survival. If negligence reduces the percentage, common sense justice rejects a black-and-white approach to accepting or rejecting a claim based on an expert's opinion as to whether there was ever a 50% chance of survival, and prefers to offer mitigated damages to represent the loss of chance.

In cases of economic loss, the rule that a claimant cannot normally recover for a lost chance is modified. In Kitchen v. Royal Airforce Association 2 All ER 241 a solicitor failed to issue a writ within the period of limitation in respect of a fatal accident. The surviving spouse sued for damages as she was unable to pursue her claim. There was no doubt that the loss was caused by the solicitors’ negligence and the only argument related to quantification of her claim. Although it was argued on behalf of the solicitors that the claimant might not have won her case, and may therefore have lost nothing, the court held that she had lost a chance and, as this was a valuable right, she should be compensated for it. Similarly, in Stovold v. Barlows (1996) PNLR 91 a solicitor acting for a vendor failed to use the appropriate system for sending the title deeds to a purchaser. Consequently, the claimant lost his chance to sell the property at a higher price. But damages were reduced by 50% as the court held that the purchaser might have bought another property even if the documents had arrived on time. In First Interstate Bank of California v Cohen Arnold & Co. (1996) PNLR 17 the claimant bank had loaned money to a client of the defendant accountants who negligently overstated the net worth of their clients. The bank then became concerned about the amount of the loan outstanding but, relying on the representations made by the defendant accountants, the bank delayed in calling in the loan. As a result of the delay in placing the property on the market, the price obtained was £1.45 million whereas the bank contended that it could have realised £3 million in an earlier sale. The Court of Appeal valued the chance at 66.66% on the assumption that “but for” the negligence, the property would actually have been sold for 66.66% of £3 million.

In commercial cases, damages are assessed not on the outcome which the claimant would have sought, but on the economic opportunity which he has lost. The claimant must prove on the balance of probabilities that he or she would have taken action to obtain the relevant benefit or avoid the relevant risk. Once this has been established, the claimant need only show that the chance which he or she has lost was real or substantial. In Coudert Brothers v. Normans Bay Ltd. (formerly Illingworth, Morris Ltd.) EWCA Civ 215 the court reviewed two earlier authorities:Allied Maples Group Ltd v Simmons & Simmons and Equitable Life Assurance Society v Ernst & Young (2003) EWCA Civ 1114. The claimant, Normans Bay Ltd. was advised by Coudert Brothers in a tender for 49% of the shares in a Russian company, Bolshevichka, in 1993, but the investment was lost. NBL claimed that, "but for" Coudert's negligence, the tender would have survived. At first instance, Buckley J assessed that chance of survival at 70%. The prior cases establish that loss of chance claims require proof on the balance of probabilities that:

1. the claimant would have sought to secure the advantage which is the subject matter of the claim for valuation.
2. where the claim depends on the hypothetical acts of a third party, e.g. whether the panel of a beauty contest would have awarded a prize to the claimant, the claimant has lost a real or substantial chance as opposed to a speculative or fanciful chance.

If both of these are proved, the court must assess that chance lost. If the chance was low, the court will award a low percentage of the value of the chance in damages; if the chance had a high probability of success, a high percentage will be awarded. On appeal the award was reduced to 40%. The court also dismissed Coudert's argument that its own negligence had broken the chain of causation because, to allow such an argument, would be to allow a party to benefit from their own unlawful act.