Supreme Court rules on loss of a chance claim

United Kingdom

In a unanimous judgment, the Supreme Court has dismissed an appeal by a firm of solicitors in relation to a professional negligence claim concerning alleged under-settlement of a coal miner’s personal injury claim in 2003. The Supreme Court found that, since medical evidence of the nature subsequently obtained in the context of the professional negligence claim would not have been obtained in 2003, it should not be admissible when assessing the extent of the Claimant’s loss in the professional negligence claim. In reaching its decision, and unlike the Court of Appeal, it did not give its general views on the admissibility of evidence that would not have been available at the time of the original underlying claim.

Background

The background to the decision is a settlement of a coal miner's personal injury claim under HM Government's compensation scheme (the “DTI Scheme”). The scheme provided a standardised mechanism to assess injury and pay compensation to miners suffering work-related vibration white finger ("VWF"), as in this case. Thomas Watkins instructed Hugh James Ford Simey (the "Firm") to make a claim under the DTI Scheme.

Under the DTI Scheme, there was a defined medical examination process to assess whether a claimant suffered from VWF and the severity of his/her condition. Compensation was payable as general damages to those claimants who suffered from VWF. Because it was deemed impracticable to investigate individual claims, depending on the severity of a claimant’s condition a rebuttable assumption was made that the claimant was not able to carry out certain daily domestic tasks without assistance. Qualifying claimants were entitled to make a claim for a services award which provided compensation for assistance in performing domestic tasks; the services award was payable as special damages. Factual evidence concerning eligibility for a services award was presented by a claimant (and his/her helper) completing a questionnaire. Each questionnaire would be considered on its merits and the claim for a services award accepted or rejected in whole or in part.

In 2000, Mr Watkins was examined in accordance with the process under the DTI scheme and it was assessed that he suffered with VWF at a level that could qualify him to make a services claim. Mr Watkins chose to also seek a services award and questionnaires were completed for that claim. Initially, his claim for services was rejected but later accepted. In 2003, and on the Firm's advice, Mr Watkins accepted a settlement offer of ~£9,500 which was in line with the tariff award for general damages for the pain and suffering he experienced from his VWF. The settlement offer did not make any allowance for a services award. The settlement offer was accepted by Mr Watkins and was expressed to be in full and final settlement of Mr Watkin’s claim under the Scheme; it prevented Mr Watkins from bringing a separate claim for a services award (which he understood).

In 2010, Mr Watkins brought a claim against the Firm alleging that, as a result of the Firm’s negligence, he had lost the opportunity to bring a services claim under the DTI Scheme (valued at ~£6,000 plus interest). In 2013, Mr Watkins underwent a medical examination, for the purposes of the professional negligence claim, which was told not to take into account the presumption that those who suffered with a certain level of VWF could no longer carry out certain domestic tasks. The results of that examination indicated a much lower level of disability than previously found and a dexterity which meant that he was able to carry out domestic tasks.

Prior to the Supreme Court judgment, the question that the courts had been grappling with was whether and to what degree the evidence from 2013 ought to be taken into account when assessing Mr Watkins' loss sought in relation to a claim which would have been resolved in 2003. Should evidence which was not sought or obtained in 2000 be taken into account? The usual answer to that question is 'no'. The principles of 'lost litigation' claims are that the court will value the lost claim by reference to loss of a chance principles, valuing the claim as at the notional trial or settlement date, and awarding interest from that point on. This means that, usually, evidence post-dating the underlying trial or settlement date will be excluded.

First instance decision - 2016

However, that was not the decision reached at first instance. The Court decided that, had the results of the 2013 examination been known in 2003, not only would Mr Watkins have been entitled to a much lower general damages award (assessed at ~£1,700), but he would not have been accepted for a services award at all. Therefore, whilst he concluded that the Firm had been negligent in advising Mr Watkins to accept the settlement offer of ~£9,500 and that, if Mr Watkins had received appropriate advice, he would probably have rejected the offer and continued to pursue his services claim, the Judge ruled that Mr Watkins’ estate (Mr Watkins had died in 2014 and his estate continued the claim against Firm) had suffered no loss because he had already been paid higher damages in 2003 than he was entitled to. Mr Watkins’ estate appealed.

Court of Appeal decision - 2018

The Court of Appeal disagreed with the first instance decision. It restated the principle that claimants in professional negligence claims are entitled, if their claim is proven, to be put back in the position they would have been in absent the negligence. In lost litigation claims specifically, the measure of loss is what the claimant would have received in compensation but for the negligence. The Court of Appeal considered the usual loss of a chance principles in such cases, requiring: the claimant to prove the claim had more than a negligible prospect of success; the defendant solicitors to show that the litigation had no value; and the court to evaluate the prospects of success (Mount v Barker Austin [1988] PNLR 493). It held as to the prospects that whether a claimant’s claim would have been unanswerable, unwinnable or somewhere in between, what the claimant should recover in the professional negligence claim “is not established by answering the question: how much of the original claim can he prove now? Rather it is established by answering the question: what was the value of what he lost then?

The Court of Appeal did acknowledge that there were limits to the principle. For example, if the original claim was later found to be based on fraud, the court would not support it and/or, if the later evidence (or event) was of such a significant or serious degree, the court may conclude that public policy required a departure from the usual principles in order to do justice between the parties. However, those exceptions were not applicable to Mr Watkins’ claim and they remitted the claim back to the County Court for a re-hearing (postponed pending the appeal to the Supreme Court).

Supreme Court decision

Permission to appeal to the Supreme Court was limited to the sole question of whether the prospects of success of a claim are to be adjudged as at the date when the claim was lost or at the date when damages are awarded.

In being granted permission to appeal, the parties had been asked to consider the principle in Bwllfa and Merthyr Dare Steam Collieries (1891) Limited v Pontypridd Waterworks Co [1903] AC426, “namely that where the Court assessing damages has knowledge of what has actually happened it should not speculate about what might have happened but base itself on what is now known to have happened”.

The submissions in front of the Supreme Court therefore focused on the admissibility in a professional negligence claim of subsequently acquired evidence relating to the value of the original claim. The Supreme Court determined that the Bwllfa principle was not in fact relevant in the circumstances of Mr Watkins’ case; it did not need to answer that question because the results of the 2013 medical examination were not relevant to loss. The Supreme Court found that the scope of the medical examination in 2013 would not have taken place under the DTI Scheme and Mr Watkins’ entitlement to a services award would not have been considered under the DTI Scheme by reference to the type of medical examination carried out in 2013.

The Supreme Court determined that Mr Watkins had lost the value of his claim under the DTI Scheme as it would have been administered in accordance with the terms of that scheme. The DTI Scheme did not provide for a claimant’s claim to be assessed by reference to the matters covered by the 2013 medical examination. It held therefore that the first instance judge erred when taking the results of the 2013 examination into account when concluding the level of general damages awarded was too high and that the services claim was of no value. Taking into account the aspects which would have been looked at by the DTI Scheme, there was no evidence that Mr Watkins’ services claim had no prospect of success or that it had no value. The Supreme Court remitted the matter back to the first instance court for assessment of the value of the loss of the opportunity to pursue his services claim.

Comment

Although the Supreme Court agreed with the Court of Appeal’s decision that the first instance judge was wrong to rely on the results of the 2013 examination, it reached that decision for a different reason on the facts. The Supreme Court dismissed the Firm’s validly made argument that Mr Watkins had already been over-compensated and “a professional claim should reflect his true entitlement to just compensation and not what would have been an uncovenanted windfall”. The Supreme Court’s decision favours Mr Watkins’ estate in permitting an ‘uncovenanted windfall’, since according to the new evidence he may already have been over-compensated, but this appears to have been limited to the particular circumstances of this case in the DTI Scheme. The underlying claim was not a claim made in normal civil proceedings; it was a claim made under the DTI Scheme which possessed different features to a civil claim and had to be assessed on that basis.

Given the large volume (albeit low value) of these types of claims in the solicitors’ market, the judgment is helpful to claimants and will no doubt be relied upon to prevent defendant solicitors relying on subsequently obtained medical evidence (where the scope of that examination was wider than under the DTI Scheme). Although this judgment is one reached on its own facts, the approach adopted demonstrates that when constructing the counterfactual scenario of what would have happened but for the negligence, subsequently obtained evidence not available at the time of the underlying matter is unlikely to be relevant.

Further reading: Edwards on behalf of the estate of the late Thomas Arthur Watkins v Hugh James Ford Simey Solicitors [2019] UKSC 54.