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Supreme Court backs law firm in 'loss of chance' negligence case

Out-Law News | 14 Feb 2019 | 3:30 pm | 4 min. read

The UK's highest court has overturned a Court of Appeal ruling that a law firm should compensate a former client for negligently failing to advise him to pursue a particular head of claim in an industrial injury case.

The original county court judge said it was for the client to prove that the claim in question would have succeeded. The Court of Appeal overturned that, saying it amounted to conducting a "trial within a trial". The Supreme Court, in a unanimous judgment, has now found that the trial judge was entitled to come to the conclusions that he did, based on the facts before him.

Professional negligence expert Michael Fletcher of Pinsent Masons, the law firm behind Out-Law.com, said that the Supreme Court had strictly applied the test set out in the 1995 Court of Appeal case of Allied Maples Group Ltd v Simmons & Simmons when coming to the conclusions that it did.

"This requires the claimant first to prove whether or not they would have pursued the lost claim on a balance of probabilities basis. In other words, the claim fails if the court concludes that they would only have been 49% likely to pursue the lost claim. Second, if the claimant overcomes the first hurdle, the prospects of success in the lost claim are then assessed by the court," he said.

"The Supreme Court also reiterated that, in assessing the first of these issues, the court can conduct a trial of the facts – in other words, looking at what the claimant would have done – but that it is inappropriate to conduct a trial of whether the lost claim would have succeeded. The judgment shows the range of issues that the court can take into account when determining the first point. Here, it concluded that the claimant could not honestly have pursued the lost claim, and so it should be concluded he would not have done so. The Supreme Court therefore found against him," he said.

Frank Perry, a former miner, had instructed Raleys, a firm of solicitors, to pursue a claim for damages against his former employer after he developed a form of hand-arm vibration syndrome through the use of vibratory tools at work. Perry had been employed by the National Coal Board, which later became the British Coal Corporation.

With Raleys' assistance, Perry claimed for compensation and agreed in 1999 to settle his claim for £11,600. However, the firm did not advise him to apply for additional compensation which, under a government scheme set up to take responsibility for miners exposed to vibration, was available where claimants required assistance with certain domestic tasks. Perry later issued proceedings against Raleys saying it had been negligent in failing to advise him to claim under this head, seeking damages representing what he would otherwise have obtained in a successful claim.

The trial judge, in what the Supreme Court described as a "detailed and lucid" judgment, agreed that if Perry had received the advice he would have brought the additional claim. However, his view was that this second claim would not have been "honest", as the nature of Perry's injury was such that it did not meet the thresholds set by the government scheme, and that it would not therefore have been successful. The Court of Appeal, finding in favour of Perry, found that the trial judge had been incorrect to do so, and substituted its own findings of fact.

The Supreme Court said that, in professional negligence cases, the court had a difficult task: "to assess what if any financial or other benefit the claimant would have obtained in a counter-factual world, the doorway into which assumes that the professional person had complied with, rather than committed a breach of, his duty of care".

"[N]one of this means that the common law has simply abandoned the basic requirement that a claim in negligence requires proof that loss has been caused by the breach of duty, still less erected as a self-standing principle that it is always wrong in a professional negligence claim to investigate, with all the adversarial rigour of a trial, facts relevant to the claim that the client has been caused loss by the breach, which it is fair that the client should have to prove," it said.

The trial judge, Judge Saffman, had been on the right side of the "clear and common-sense dividing line between those matters which the client must prove, and those which may better be assessed upon the basis of the evaluation of a lost chance", as set out in the Allied Maples case, the Supreme Court said.

"It was not ... wrong in law or in principle for Judge Saffman to have conducted a trial of the question whether Mr Perry would (or indeed could) have brought an honest claim for a Services Award, if given competent advice by Raleys," it said. "That was something which Mr Perry had to prove on the balance of probabilities, and which Raleys were entitled to test with all the forensic tools available at an ordinary civil trial, and by proof or challenge of alleged facts relevant to that question, even if the same facts would have formed part of the matters in issue, either at a trial of the underlying claim, or upon its adjudication or settlement pursuant to the Scheme."

The Supreme Court also found that the Court of Appeal was not entitled to interfere with the trial judge's findings of fact.

Professional negligence expert Michael Fletcher said that the circumstances of this case, namely whether a claim could have been pursued honestly, were quite unusual and only likely to arise rarely.

"However, this reiterates the need for claimants and defendants in solicitors' negligence cases to consider carefully the factual evidence on whether the claimant would have pursued a lost claim - it will be risky for a claimant to pursue a 'loss of chance' claim unless they are confident they can demonstrate that they would have pursued the lost chance," he said.