Court of Appeal confirms 'lost opportunity' principles in negligence claims

The Court of Appeal has decided that a firm of solicitors must pay almost £15,000 for negligently under-settling a client's personal injury claim and found that the lower court had erred in its approach to causation in a professional negligence claim. In confirming the correct legal principles, the Court also criticised the insurers of defendant solicitors for requiring claimants to prove every issue in the underlying matter.

In Frank Perry v Raleys Solicitors, the Court of Appeal decided that the original trial judge had wrongly determined, on the balance of probabilities, whether the 'lost' claim would have been successful. The correct approach was in fact to question whether the claimant would have acted differently had he been properly advised.

Background

The Claimant, Frank Perry, was a former miner and after developing vibration white finger, instructed miners claim firm Raleys (now defunct) to seek compensation through a government scheme. An offer of £11,660 to settle general damages only, was made by the defendants and on Raleys' advice, was accepted by Mr Perry in 1999. 

Ten years later, Mr Perry brought a professional negligence claim against the firm, claiming damages for the loss of opportunity to claim a 'services award' for assistance he needed with gardening and DIY tasks.

The case was heard in 2015 at Leeds County Court, and the judge ruled that despite Raleys' admission of negligence, this had not affected Mr Perry's prospects of succeeding on this element of the claim. In other words, on the balance of probabilities he would not have been successful. The judge did not accept that Mr Perry could not perform the relevant tasks unaided and so found for the solicitors.

The Court of Appeal's approach

The Court of Appeal disagreed with the lower court's decision, and criticised the trial judge for conducting a 'trial within a trial'.

The Court found that there had been a material error of law: the judge was wholly wrong, as a matter of principle and in the particular circumstances of the case, to have engaged in a factual determination as to whether on the balance of probabilities, Mr Perry was unable to carry out the relevant tasks without assistance.

The correct approach in a claim against solicitors for negligent omission (as a result of which no claim against a third party had been pursued) is for the court to assess the prospects of success and award damages on a percentage basis, unless it is overwhelmingly clear that the claimant was bound to succeed or conversely, had only a negligible prospect of success. In such circumstances the court could move to a 100% or nil award.

The Court made clear that the proper questions were (a) whether, at the date of settlement, Mr Perry, if properly advised, would have acted differently and made a claim for the additional award; and (b) if he had made the additional claim, what would have been his chances of success. The judge had approached the second question correctly, but his approach to the first question was wrong.

The Court ruled that Mr Perry had lost an 80% chance of succeeding in the additional claim and in doing so allowed the appeal.

The judge had also erred in concluding that Mr Perry, his wife and two sons had given false evidence about Mr Perry's ability to perform tasks. Overall, the judge had not only engaged in the wrong exercise, but could not rationally, on the material before him, conclude that Mr Perry was dishonest in contending that he was unable to perform the relevant service tasks without assistance.

In her Judgment, Lady Justice Gloster was critical of negligent solicitors and their insurers in the way that professional negligence claims were commonly defended by putting the claimant to proof on every issue in the underlying claim.

She said:

"It is far too easy for negligent solicitors, or perhaps more pertinently, their insurers, to raise huge obstacles to claimants such as Mr Perry from pursing their claims, if the latter are required, effectively, to prove in the litigation against solicitors that they would have succeeded in making such a claim against the third party."

…Such an approach is intellectually unsound; it requires the court, inevitably many years later, to investigate whether a claimant, who as here, may be unsophisticated and not have kept records, to prove what he would have done many years earlier. In cases of admitted or proven negligence, on the part of solicitors or other professionals, that should not be the correct approach."

Commentary

The Court of Appeal's decision is helpful in confirming and clarifying the 'loss of chance' principles that apply in professional negligence claims, where it is alleged that the claimant has lost an opportunity due to the professional's negligence. It also highlights the obstacles that a claimant must overcome in order to succeed, even if breach of duty is established or admitted.

While this case was specifically about a solicitor's firm failing to pursue a personal injury claim, it is interesting to see that the courts are alive to the hurdles which are commonly raised by defendant professionals and their legal advisers to defeat claims which on a 'common sense' approach should succeed. The principles are equally applicable to commercial or financial matters.

In all 'lost opportunity' claims, cutting through the issues and focussing on what the claimant would have done had they been properly advised and then assessing the prospects of success on a percentage basis, in order to award appropriate damages is clearly the correct approach. Any doubts as to likelihood of success in the underlying matter can and should be reflected in the court's assessment of the percentage chance of success.

Michelmores' professional negligence team have substantial experience and expertise in advising on a wide range of claims against solicitors and other professionals.