Privy Council 2 May 2007

This appeal considered the complexities which arise when assessing a loss of chance claim in circumstances involving a third-party claim against insurers. Although the case concerned the position under Gibraltan law, many of the issues could arise in English cases. The claimant was a director and owner of a company, W&F. He suffered an accident at work in August 1994. The first defendant firm and second defendant barrister acted for the claimant in bringing a claim against W&F. It was common ground that the claimant lost any such claim due to the negligence of the defendants in failing to issue proceedings within the limitation period. Since the company had been wound up and could not have satisfied a claim, the claimant would have had to claim under the company's employers' liability policy with Assicurazioni Generali SpA (AG). In breach of a condition precedent to liability under that policy, no notice of any claim was given by the company to AG until May 1995.

The Court of Appeal of Gibraltar held that the claimant’s chances of success against W&F were 100% and that he had an 80% chance of recovering from AG, giving a overall chance of success of 80%. The Privy Council disagreed with this outcome, concluding that there was a 70% chance of success against the company and a 40% chance of recovery from AG, giving an overall prospect of success of 28% (70% x 40%).

Comment: the defendants tried to argue that the Privy Council should not apply the traditional percentage approach to loss of chance claims but instead follow the House of Lords’ decision in Gregg v Scott and adopt an “all or nothing” approach applying a balance of probabilities test. The court refused to permit this new point to be raised on appeal but commented in passing that there are obvious differences between the medical context of Gregg v Scott and cases involving the negligence of lawyers.