Damages should be certain or ascertainable. What if the assessment is too difficult? The purpose of damages is to compensate and “the fact that damages cannot be assessed with certainty does not relieve the wrongdoer of the necessity of paying damages”: Chaplin v Hicks [1911] 2 KB 786 at 792.

How does a Claimant establish his claim when the loss depends on what he might have done had he been given proper advice and then, what a third party would have done?

The key principles remain those set out in by Stuart-Smith LJ in Allied Maples v Simmons & Simmons [1995] 1 WLR 1602. If the negligence is a positive act such as careless driving “the question of causation is one of historical fact”. If the claimant proves on the balance of probability that the act caused the loss then he or she recovers the damage in full.

If the negligence is an omission, such as a failure to give proper advice, “causation depends, not upon a question of historical fact, but on the answer to the hypothetical question, what would the plaintiff have done if the equipment had been provided or the instruction or advice given? This can only be a matter of inference to be determined from all the circumstances.” To make matters more complicated what if the quantification of damage depends on the future uncertain acts of a third party? “It is trite law that these questions are not decided on a balance of probability, but rather on the court's assessment, often expressed in percentage terms, of the risk eventuating”.

In summary, where the actions of a third party are relevant you can prove that a past event has happened but you cannot prove that a future event will happen. All that can be done is to evaluate the chance of that event happening. “But, in my judgment, the plaintiff must prove as a matter of causation that he has a real or substantial chance as opposed to a speculative one. If he succeeds in doing so, the evaluation of the chance is part of the assessment of the quantum of damage, the range lying somewhere between something that just qualifies as real or substantial on the one hand and near certainty on the other.”

In order to answer the question I posed about how a claimant establishes his or her claim when a third party’s future actions are relevant, it is necessary to follow four sequential steps:

  1. What would the claimant have done? This is determined on the balance of probability: will the court accept the claimant’s case that he or she would have avoided the loss? 
  2. Is there a real or substantial chance as opposed to a speculative one that the third party would have gone along with the claimant’s proposals? 
  3. Yes: then the court will assess the chance of the third party going along with the claimant.
  4. No: then the claimant will fail on causation and any award of damage will be nominal.

These cases are highly fact sensitive as can be illustrated by these examples. In Bacon v Howard Kennedy (A Firm) [1999] PNLR 1 the testator’s will would have left the estate to the plaintiff. Due to HK’s negligence the will was not concluded. HK argued that the damages should be reduced to take account of the fact that the testator might have changed his mind. The Judge rejected this stating that such a possibility was merely speculative.

In Perkins v Lupton Fawcett (A Firm) [2008] EWCA Civ 418 Ps sold their interest in a business which had substantial book debts. They gave a warranty that the debts were recoverable. Ps and LF believed that the purchaser had to take proceedings before they could rely on the warranty whereas all they had to do was take reasonable steps to recover the debts. The Court of Appeal decided that had Ps been advised properly there was a 20% chance of the purchasers agreeing the warranty in the form that Ps had wanted.

In Leonard Hartle v Messrs Laceys (a firm) (2000) 16 Const LJ 44 H purchased a property with development potential. H and the vendor could not agree an increase in the price to take account of this potential and the vendor required H to enter into a covenant restricting the development. The covenant was not registered. An adjoining site with planning permission came onto the market and H purchased it. He intended to sell both plots to developers. L misunderstood the restrictive covenant and there was a delay in exchange. The original vendors found out about the purchase and registered the covenant as a land charge. H therefore lost the chance of selling the land free of the covenant. The Judge calculated the net proceeds of the lost sale as £360,000 (a). H lost the chance of making that sum. He later sold the plots for £70,000 + £80,000 = £150,000 (b). The Judge considered that the approach should be: (a-b) x 60% = £126,000. The difference was reduced by 40% to reflect the value of the chance.

The role of loss of a chance can be viewed in three ways: as a head of compensatory damage; as a causation evidential burden that the claimant must discharge; and as a means of calculating the award.