The Supreme Court has upheld the appeal of a firm of solicitors defending a professional negligence claim and helpfully reiterated well-established principles about the approach the court must take when considering the issue of causation in loss of chance cases. The decision clarifies what has to be proved in cases where the question for the court depends on what: (a) the claimant would have done (which the claimant must prove to the usual standard ‘on the balance of probabilities’); compared with (b) what others would have done (which are better assessed on a loss of chance basis).

Background

The facts of Perry (Respondent) v Raleys Solicitors (Appellant) [2019] UKSC 5 date back to 1996, when Mr Perry (a former miner) retained Raleys Solicitors to advise him on a personal injury claim for a condition called Vibration White Finger (“VWF”). The VWF compensation scheme contemplated two main types of award, corresponding broadly with general damages and special damages (which could include a ‘Services Award’). The firm successfully settled Mr Perry’s claim for general damages, but made no claim for a ‘Services Award’.

Mr Perry sued Raleys, claiming that by reason of the firm’s negligent failure to give him appropriate advice, he had lost the opportunity to claim a Services Award. Raleys admitted breach of duty shortly before trial, but denied that breach caused Mr Perry any loss.

First instance decision

At first instance, the judge concluded that Mr Perry had failed to prove that Raleys’ negligent advice had caused him loss. It was held that when Mr Perry settled the claim, VWF had not caused him any significant disability in performing certain domestic tasks required by the compensation scheme, sufficient to have enabled him to make an honest claim for a Services Award. The judge explained that Mr Perry’s complete lack of credibility as a witness led to this finding. The claim was dismissed with costs and Mr Perry appealed.

Conclusion of the Court of Appeal

The Court of Appeal reversed the first instance decision. Among other evidence-based grounds for allowing the appeal, it identified two ‘errors of law’ and held that the trial judge had:

  • in addressing the issue of causation, wrongly conducted a “trial within a trial”; and
  • incorrectly imposed the burden upon Mr Perry to prove that fact on the balance of probabilities.

Supreme Court’s analysis of causation in professional negligence cases

The Supreme Court noted that the assessment of causation and loss in cases of professional negligence has given rise to difficult conceptual and factual issues because, unlike in most cases, “the court is required to assess what if any financial or other benefit the client 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.”

Although in these tricky situations where the court has to deal with counter-factual and future events it may occasionally depart from the ordinary burden on a claimant to prove facts on the balance of probabilities (by having recourse to the concept of loss of a chance), this does not mean that the common law has abandoned the basic requirement to prove causation altogether.

The Supreme Court stated that the correct approach could be found in Allied Maples Group Ltd v Simmons and Simmons [1995] 1 WLR 1602, which identified a “clear and common-sense dividing line” between:

  • those matters which the client must prove on the balance of probabilities: where the question of whether the client would have been better off depends on what the client would have done upon receipt of competent advice; and
  • those which may be better assessed upon the basis of a lost chance: where the supposed beneficial outcome depends on what others would have done (involving hypothetical counter-factual and/or future scenarios).

The significance of this distinction is that the burden of proof is different for the claimant in a loss of chance scenario. The claimant only has to show that, if the professional had not been negligent, there was a “real and substantial chance” of the relevant third party acting to the claimant's advantage. It is not necessary to prove what the other party would have done on the balance of probabilities.

The Supreme Court was clear that where the question for the court turns upon the assessment of a lost chance, it is generally inappropriate to conduct a “trial within a trial” – but the principle does not extend further than that (i.e. to claims concerning the claimant’s own conduct, which must be proved on the balance of probabilities).

Appeal succeeds at the Supreme Court

Applying the ‘dividing line’ to the facts, the Supreme Court held that Mr Perry’s was a ‘balance of probabilities’ type case because the question for the court turned on his own conduct – i.e. whether Mr Perry would (or indeed could) have brought an honest claim for a Services Award, if given competent advice by Raleys. That was something which Mr Perry had to prove on the balance of probabilities and which Raleys was entitled to test with all the forensic tools available at an ordinary civil trial. Due to his lack of credibility, Mr Perry failed to do so.

The Supreme Court also disagreed with the Court of Appeal’s assessments that:

  • the trial judge had wrongly imposed too high a burden upon Mr Perry – i.e. a burden of proving not merely that he would (properly advised) have brought an honest claim, but also a successful claim; and
  • this was one of the rare cases where it was appropriate to reverse the trial judge’s findings on a number of issues of fact.

Therefore, for all of these reasons, the Supreme Court reinstated the first instance decision.

Comment

With this decision the Supreme Court has not made new law, but it has provided a helpful reminder of first principles when applying the burden of proof to issues of causation in professional negligence cases. It is clear that the courts will not allow the loss of a chance principle to “creep” into matters which turn on what the claimant (as opposed to third parties) would hypothetically have done if the professional had not been negligent.

On issues that the claimant must prove on the balance of probabilities, honesty is absolutely fundamental. As the Supreme Court said, “If nuisance value claims fall outside the category of lost claims for which damaged may be claimed in negligence against professional advisors, then so, a fortiori, must dishonest claims.”