Court Gives Guidance on Loss of Chance Claims
In the recent case of Chweidan v Mischcon De Reya Solicitors, the Court set out a 6 stage test for quantifying claims involving a loss of chance. Such claims often arise in professional negligence proceedings, where, as a result of negligent advice from professional advisers, the Claimant has lost the opportunity to pursue a claim or some other remedy.
In this case, Mr Chweidan was a former employee of J P Morgan, and had brought various claims against them in the Employment Tribunal. Mr Chweidan initially succeeded in the Employment Tribunal and was awarded damages of £500,000. However, JP Morgan appealed the decision and it was ultimately overturned. Mr Chweidan was denied the opportunity to lodge a cross-appeal because his solicitors, Mischcon De Reya, did not lodge the cross-appeal on time. The ultimate result of the proceedings was that Mr Chweidan's damages were reduced down from £500,000 to £68,000 and he was landed with a costs bill that exceeded that sum.
Mr Chweidan therefore sued his solicitors on the basis that he had suffered from a loss of chance in respect of their failure to lodge the cross-appeal on time. The solicitors admitted breach in relation to their failure to lodge the cross-appeal but said that Mr Chweidan had not suffered any loss because the prospects of success in the cross-appeal had very little chance of success.
The Court determined that the prospects of the cross-appeal succeeding were, in fact, 18% in that J P Morgan might have settled. Accordingly, Mr Chweidan was awarded 18% of the losses claimed.
The Court set out the following criteria for calculating a loss of chance claim, once a breach of duty has been established:
i. The Claimant must prove that the claim has a chance of success which is more than merely negligible.
ii. If the Court decides that the Claimant's chances are more than merely negligible, then it will have to evaluate them. This requires the Court to make a realistic assessment of what would have been the Claimant's prospects of success had the original litigation been fought out.
iii. This means that the Court should assess the likely level of damages which the Claimant would most probably have recovered had the underlying action proceeded to Judgment and then apply an appropriate fraction to that sum to reflect the uncertainties of recovering such damages.
iv. In some loss of chance cases it may be appropriate to view the prospects on a fairly broad brush basis whilst in other cases it may be correct to look at the prospects in greater detail.
v. The Court should factor into its assessment of loss of chance issues such as the availability of oral and documentary evidence, and the possibility that the claim might have settled.
vi. If there are separate hurdles for the Claimant to overcome, it may be necessary to apply a series of successive discounts in order to value the overall chance that has been lost. In other words, the percentage prospects on each hurdle should be multiplied together to give an overall lower percentage prospect.
The case provides a helpful summary of the test to be applied in quantifying the loss of a chance and highlights that while the Claimant will still be required to show that in losing the opportunity to pursue a claim they have lost something which was more than merely negligible, the evidential burden will rest on the Defendant to show that nothing of value has been lost.
Posted on: 29/09/2014
This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.
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