Edwards on behalf of the estate of the late Thomas Arthur Watkins (Respondent) v Hugh James Ford Simey Solicitors (Appellant)
In this much anticipated judgment on a claim arising from the handling of VWF litigation against British Coal Corporation (“British Coal”), the Supreme Court considered the correct approach to adopt in lost opportunity claims – last considered in the landmark case of Perry v Raleys . The case also provides useful guidance as to the relevance – in failed litigation cases - of evidence obtained during the course of professional negligence proceedings which was not available at the time of the underlying claim.
Thomas Arthur Watkins (“Mr Watkins”) was employed by British Coal as a miner from 1964 until 1985. During that time, he developed a condition known as Vibration White Finger (“VWF”) as the result of the use of vibratory tools.
In 1999 the Department for Trade and Industry set up a scheme to provide compensation to miners who suffered from VWF (“the Scheme”). The Scheme provided for tariff-based compensation to be paid for pain, suffering and loss of amenity (“General Damages”) and for handicap on the labour market and other financial loses (“Special Damages”) which included past and/or future loss of earnings. Special Damages could include a services award for qualifying miners in respect of the need for assistance in performing certain day-to-day domestic tasks.
It was impractical to assess each individual claim under the Scheme in detail; instead, a presumption was made about the level of assistance required by each miner based on a medical assessment of the levels of severity of the VWF at the relevant stage. It was a quick, efficient and formulaic approach, designed to ensure that claims under the scheme were dealt with expeditiously.
In 1999 Mr Watkins instructed Hugh James Ford Simey Solicitors (“the Solicitors”) to act for him in relation to his claim under the Scheme. A medical test carried out under the Scheme concluded that the severity of his condition was sufficient both to obtain a general damages award and also to go forward for assessment for a services award.
In February 2003 Mr Watkins was offered the sum of £9,478 “in full and final settlement” of his claim – this took into account only general damages and included nothing in respect of a services award. The Solicitors wrote to Mr Watkins reporting the offer and explaining what would be involved should he wish to proceed with a claim for special damages. No advice was given. Mr Watkins subsequently accepted the offer of general damages and chose not to pursue a services award.
In January 2008 Mr Watkins brought a claim for negligence against the Solicitors. He contended that, as a result of their negligence, he had lost the opportunity to bring a services claim under the Scheme and valued the lost opportunity at £6,126.22 plus interest.
With the Court’s permission, the parties instructed a single joint expert (“the expert”) to consider whether Mr Watkins would, if properly advised, have brought a claim for a services award. However, his instructions were broadened by the parties to include a request that he consider the extent of Mr Watkins’ symptoms.
The expert subsequently concluded that Mr Watkins’ symptoms would have been insufficient to justify a services award and, furthermore, that he had been “over compensated” for the general damages claim. Mr Watkins died in January 2014, at which point his daughter, Jean Edwards, was appointed to continue the claim on behalf of his estate.
At first instance, the court held that Mr Watkins had received negligent advice and that, had the advice been appropriate, he would probably have decided to reject the offer of general damages and would have pursued his services claim. However, the judge also held, on the basis of the expert’s report, that Mr Watkins had suffered no loss and dismissed the claim.
The Court of Appeal
The Court of Appeal decided that the judge at first instance had been “wrong to conduct a trial within a trial” when determining the value of Mr Watkin’s claim. The judge should not have relied on the expert’s report as it would not have been available at the time of Mr Watkin’s notional services claim under the Scheme. It would be “inappropriate to lose sight of what would have been the outcome under the Scheme by reference to after-coming evidence which would not have been brought into being at the time”. The exception to this approach would be where there is fraud or an unexpected development which has a significant impact on what would have been recovered under the original claim.
The Supreme Court
The Solicitors appealed on a number of grounds, but permission was granted in relation to one point only – the assessment of loss under the standard legal principle of restoring a claimant to the position he would have been in had the negligence not occurred, and, in particular, the application of the so-called Bwllfa1 principle (that when assessing damages the court should not speculate about what might have happened, but should base its conclusions on what is now known to have happened).
The Supreme Court made the following points:
1. It was established at first instance that there had been a negligent breach of duty and causation. In particular, if properly advised Mr Watkins would have made an honest services claim. These conclusions were not appealed. As such, it fell to Mr Watkins’ estate to prove only that a loss has been suffered. The approach to assessing causation pursuant to the well-publicised decision in Perry v Raleys was not relevant here.
2. The expert’s report was relevant only to the issue of causation - whether Mr Watkins would, if properly advised, have continued with a claim for services. As such, it was irrelevant to the assessment of loss.
3. Mr Watkin’s claim was within the Scheme, not a civil claim for damages. The value of Mr Watkin’s claim should be assessed within the context of the Scheme, in which there would have been no expert’s report equivalent to that obtained during the course of the professional negligence proceedings. Rather than the expert’s report being a “knockout blow”, it was to be disregarded and the Bwllfa principle was therefore irrelevant.
Accordingly, the Supreme Court dismissed the Solicitors’ appeal. Mr Watkin’s claim must now be assessed on a loss of chance basis, based on what he would have been awarded for a services claim under the Scheme.
It is clear from the judgment of the Supreme Court that claims handled under a compensation scheme should be treated differently from civil claims for damages. In particular, when assessing claims arising out of a scheme, any evidence that was not available at the time of the initial claim under the scheme should not be taken into account in a subsequent claim for loss of chance (subject to very limited exceptions referred to above).
The judgment does not provide the anticipated further analysis of the test for causation set out in Perry v Raleys. As such, the ‘honesty’ test established in that case remains good law.
This is, in one sense, good news for professionals and their insurers as this will dissuade parties from obtaining speculative expert evidence on loss in the hope of a further windfall. In some circumstances this will mean an accurate assessment of loss can properly take place at an early stage on the evidence available at the time of the lost chance.
On the other hand the Supreme Court failed to properly grapple with the question of the test for litigated matters and instead confined its analysis to the operation of the Scheme itself. The situation is unfortunately far from clear and remains fertile ground for disputes.