The Supreme Court case of Perry v Raleys Solicitors [2019] UKSC 5 was an opportunity for the Court to consider the correct approach to determining loss of chance claims arising out of lost litigation.
In short, the landmark judgment means that if a claimant would probably have lost their underlying claim, nevertheless they may be able to succeed in a professional negligence claim against a solicitor if they can prove that their underlying claim had at least a real and not fanciful chance of succeeding.
Facts
This case concerned a scheme for the compensation of miners with Vibration White Finger’s Syndrome between 1999 and 2011, which scheme settled approximately 175,000 claims, paying out £1.7 billion in compensation.
Loss of Chance
Mr Perry had instructed solicitors, Raleys, in this personal injury claim which they settled and Mr Perry received £11,660 for general damages. In 2009 Mr Perry sought to bring a professional negligence claim against Raleys because they had negligently failed to advise him that he could claim for a “services award”, which was an additional amount of compensation for being unable to carry out various manual tasks around the home following the injury.
By not being aware of and being advised on this part of his claim, he suffered from a “loss of chance” to recover any damages in this regard.
The test for loss of chance following Perry v Raleys
Where the Claimant has lost the chance to pursue or potentially win a previous claim due to their solicitors’ negligence, the court is not required to conduct a “trial within a trial” and make a decision on whether the original claim would have succeeded or failed.
Instead the following formula is applied:
x % chance of original claim = value of professional negligence against solicitors
This rule is not applied in all cases. Since the decision in Allied Maples, consideration has been given to the causation principle:
- The Court makes a finding ‘on balance of probabilities’ in deciding what the Claimant would have done, had the Defendant not been negligent; and
- To the extent that the Claimant’s loss depends on the hypothetical actions of third parties, the lost chance is calculated on a percentage basis by reference to the prospects that the better result would have been secured.
In Perry v Raleys, the Supreme Court decided on the above basis that the County Court would have come to a decision about whether, on the balance of probabilities, Mr Perry would have pursued an honest claim for loss of ability to perform domestic tasks, had he been properly advised of the opportunity to do so.
The Court found that on the balance of probabilities, Mr Perry would not have pursued such a claim as he had not lost the ability to carry out most of those manual tasks. The Court found that Mr Perry lacked credibility as a witness and one of the reasons for this was that his evidence as to his disability was contradicted by evidence on his social media e.g. photographs of his activities. Furthermore, any impairment which he had suffered was not a result of the actions of the Defendant in the personal injury claim, but as a result of a previous injury. In conclusion, Mr Perry could not show that if he had been properly advised, he would have advanced a claim for a services award.
Comment: Loss of chance claims against negligent solicitors
This Supreme Court judgment highlights the following issues:
- There is no distinction for these purposes between “lost litigation” claims and claims for loss of a chance under other commercial transactions.
- There is no change to the requirement that a claim in negligence for loss of chance requires proof that the loss has been caused by the breach of duty and that the claimant has lost something of value.
- There is also no change to the causation requirements established in Allied Maples that a claimant must prove his/her actions on the balance of probabilities before then determining how a third party would have acted on a lost chance basis.
- In addition to claims for nuisance value, dishonest claims will not be recoverable against negligent professionals.
The Supreme Court held that it had been proper for the trial judge to have conducted a ‘trial within a trial’ on the question of whether the Claimant would or could have brought an honest claim for compensation had his solicitors given him adequate and competent advice.
This case was also an example of where when the Court assessing of what the Claimant would have done if properly advised, Defendants may seek to challenge a Claimant’s credibility through evidence or cross examination, and the Court will make findings accordingly.
Professionals and in particular, insurers, will take comfort from the approach taken in this case which reinforces that Claimants, rather than third parties, are still required to provide their actions on the balance of probabilities and that dishonest claims can expect to be dismissed.
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