11 December 2014
Is your claim in with a chance?
Can you claim through the courts for a lost opportunity? Simon Carroll, associate in the litigation and dispute resolution team, looks at what the courts consider when faced with a “loss of a chance” case.
Whether an individual or a business, you can claim through the courts for a loss of chance. Very often, but not exclusively, these claims will concern professional negligence or a contractual dispute.
Claims for loss of chance can, however, be difficult and unpredictable, especially in the context of a lost opportunity to litigate.
In assessing claims and damages, a court will often have to speculate on one party’s loss to such an extent that the claimant can end up committing to expensive litigation without any real idea of what the ultimate damages award may be.
Although a claimant may consider they have a strong claim and be entitled to some redress if wrongly deprived of the opportunity of pursuing it, how should they best assess their prospects and whether or not to proceed?
Unlike in criminal proceedings, civil courts won’t hold a trial within a trial to determine if the lost claim would have succeeded.
Therefore a claimant needs to show that the lost claim had a real and substantial prospect of success. The court will then attempt to evaluate the loss by assessing the likely damages that might have been awarded. From there, it will apply a percentage reduction to reflect the inherent or specific uncertainties which would have been involved in a trial.
The calculation isn’t scientific and the court will usually decide the award based on the evidence before it.
Lawyers in litigation
The recent case of Chweidan v Mishcon de Reya highlighted just how difficult it can be to assess damages in loss of chance cases.
Following his dismissal by JP Morgan, former trader Russell Chweidan appointed the City firm of solicitors to act on various employment and discrimination claims. During the course of the litigation, Mishcon failed to take a number of steps that resulted in some claims not being able to be pursued.
Chweidan brought a £350,000+ claim for the lost opportunity to litigate but, as he was unable to show how the lost litigation would have turned out, his claim was at best for a loss of chance of winning.
At the High Court, Mrs Justice Simler assessed the evidence and considered both the prospect of the appeal succeeding and the chance of Chweidan’s underlying claim succeeding, once the case was sent back to the lower court.
She ruled that the chance of a successful appeal was 50% and the chance of the underlying claim succeeding was 33% - reducing his overall chance of winning to 16%. This was increased by 2% to reflect the value of the possibility of an early settlement if the claim had gone ahead.
Overall, she ruled that there was an 18% chance that Chweidan’s unfair dismissal case against JP Morgan would have succeeded and awarded him 18% of the likely claim value of £357,574, resulting in damages of £64,363. She also awarded 18% of £10,000 likely interest accrued after the Tribunal judgment, resulting in a total sum of £66,163.
Impossible to predict
While the final figure was much less than the original claim, it demonstrates the uncertainty surrounding the evaluation of lost chance claims. It can be almost impossible to predict accurately what awards might have been given based on how witnesses might have behaved and how points might have been argued.
Careful consideration needs to be given to what and how evidence is to be put before the court – such claims need to be carefully contemplated and tactical negotiations considered from the outset.
The missed masterpiece
This second example cites a private art collector who wished to buy a painting at auction.
Having briefed an art dealer to bid on his behalf, the buyer would have expected the dealer to have completed the necessary paperwork to allow him to participate on sale day. As the dealer failed to do so and was unable to bid, the art collector considered claiming for loss of chance, as the dealer’s actions had lost him the opportunity to acquire the painting.
Although there would have been no guarantee that the dealer would have secured the painting, the claimant could have showed the court that his bid would have had a substantial prospect of success as the price paid was well within the budget limit he had set.
For legal advice on making a claim call us on 01753 279039 or email firstname.lastname@example.org